Unanswered Questions

After watching the must anticipating video,” How will twitter make money”, I am still left with a lot of questions and little answers. The CEO of Twitter, Evan Williams, did not have a solution for this. He stated that most of Twitter’s resources (97%) were being directed at improving the site and business, and not focused on deriving profits from the Twitter service. He did recognize that branding through Twitter is very desirable and many companies want solutions for this, and this is a possible way to extract some of the value Twitter provides. However, Evan’s thought as the site develops is that profits will come in time. First, I disagree with this approach. Not having a model for future profit growth is a horrible business practice. Just believing that the company with make money in the future because people like the service is tantamount to disaster. Personally, I don’t think social media sites will ever make that much money. As far as income, advertising will be there only revenue stream. Yes, if the site is large enough with enough followers, than this should allow for some major marketing potential. So is the company going to charge businesses to have access to their virtual database. Why would a company pay when they can sign up for free and twitter questions like “would you pay for $2.50 for a Big Mac”. If they charge all users, then no one would be a follower of the site. Additionally, the barriers to entry for social media sites are very low. Anyone with some programming expertise and a few resources can start up the next Twitter. This is why in my opinion, only business models like the “Brokerage Model” or the “Merchant Model” will be the ones that thrive financially as outlined in “Business Models on the Web”. The best performers are sites that fall into these models. Some examples are Ebay, Amazon, and Netflix. These sites actually offer value to the customer that can be extracted by the company as opposed to Twitter. The only way for Twitter to become profitable is to build up a social database that can never be destroyed. However, looking at the recent