It has been interesting following the chatter in the blogosphere around the question of what is going to be Twitter’s business model? This is a relevant topic to many because: A) Twitter is on the cusp of becoming mainstream and has already become mission-critical to lots of bloggers (myself included); B) An ecosystem of third-party services is forming around Twitter so they need it to succeed; and C) Twitter is increasingly recognized as being a pretty unreliable service.
While seeing business model as a solution to a technical infrastructure problem is akin to confusing tail with dog, it is nonetheless a topic worth considering if for no other reason than necessity is the mother of invention.
A Quickie Twitter Primer
For those who don’t know, the SO WHAT of Twitter is that it is a really simple way of publishing short message SHOUT OUTs (of 140 characters or less length) on any topic of interest – what you are doing, worthwhile links, nuggets of wisdom, etc.
These shout outs, known as tweets, can be accessed and created via any number of front-ends, including web pages, embeddable widgets, mobile devices, and native applications.
Because Twitter wisely opened up its service to third-party developers (via published APIs), there has been lots of innovation in terms of client apps, and plentiful creation of interesting back-end services that piggyback on the aggregate (and growing) reach of the Twitter network (vSocial’s video tweet service, Twiddeo, is one example).
In fact, it is well-known that the Twitter API generates 10X the overall traffic that the Twitter Web Site does. Now that’s leverage for you!
A specific cornerstone of Twitter’s goodness is the fact that its messaging model is asynchronous; namely consumers have to specifically opt-in by clicking “follow” on an account holder’s Twitter page to subscribe to and receive their tweets.
Moreover, "following" is a unidirectional mechanism in that it does not give the follower/subscriber the right to publish a tweet back to the publisher. The publisher must explicitly opt to follow you back first.
This approach mitigates against the type of broadcast spam you see in email mailing lists/discussion boards, where one spammer can subscribe to the list and then blast everyone on the list. Given the amoral nature of spammers, this asymmetry is a pretty potent differentiator for Twitter.
On Micro Formats and Structured Posts
Some time back, I wrote a post called ‘What the hell is Web 2.0?’ which theorized that the blog creation process would evolve to enable consumers to create "structured" posts.
I put forth 16 different types of structured posts, including business listings, product listings, reviews/summaries, job listings, maps and itineraries, stock quotes, etc., and the idea was that next-generation syndication and subscription systems would enable posts to be processed in a context-aware fashion.
Hence, a business listing might have specific methods to ‘add to rolodex’ or ‘view ratings’ or ‘pin listing on my local map.’ A product listing might have methods to ‘add to file cabinet’ or ‘recommend this product’ or ‘buy it.’ Stock quotes would have their own set of methods, and so on.
The key point is that such a model allows users to turn flat, unformatted data and raw content items into structured information containers by providing clearly-defined contextual wrappers and handles for working with those items.
Because such an approach systematically connects the dots between me, my content and my network, this substrate becomes increasingly rich and manageable, and provides natural, logical ways for like minds to connect with and exchange knowledge with one another.
Envisioning Twitter 2.0
So how does Twitter play in this realm? What I envision is Twitter bifurcating its service between its free “flat data” messaging service and launching a premium "structured" messaging service layer on top of it.
Specifically, I envision the customer for such a service being the commercial businesses and serious online brand builders that want to gain the publishing tools necessary to better target and more richly cultivate a conversation with their audience via this viral, decentralized and spam-free messaging/marketing channel.
Where does the consumer fit in this equation? As before, users can opt-in/out if they don’t want structure or aren’t interested in a specific type of listings, e.g., commercial business communications.
Think of it as an additional layer on the exact same onion with all of the benefits of asynchronous-ness albeit with a little more terra firma baked in.
Such an approach is infinitely better than dropping disruptive Google-style ads inline within tweets, and it allows the free service to grow to ubiquity while enabling Twitter to monetize the goodness of context.
Plus, it has the potential to re-define the way advertising works.
Would Procter & Gamble jump on this bandwagon? What about small businesses? Would consumers embrace it?
UPDATE 1: Great post by Tim O'Reilly, 'Why I lLove Twitter,' which really captures the essence of what makes Twitter standout. Here is a blurb from the post:
What's different, of course, is that Twitter isn't just a protocol. It's also a database. And that's the old secret of Web 2.0, Data is the Intel Inside. That means that they can let go of controlling the interface. The more other people build on Twitter, the better their position becomes.
There's a real lesson to Facebook here about giving other services (like Twitter) access to their social graph. They have the best one going, but because they try to keep users coming back to their interface, and even the applications built on their service have to live in Facebook, they end up as a ghetto rather than a true internet service. It's the data, not the interface! Let other people use your data, build on it, and it will still belong to you. Hold it too tight, and they will compete with it.
Also, TypePad buys Pownce (Twitter competitor), and shuts it down, leaving Twitter more undefended hill to swallow.
Related Links:
- Envisioning the Social Map-lication: An application that systematically connect the dots between me, my content and my network.
- vSocial launches Twiddeo: Twitter meets video, and vice-versa.
- Advertising 3.0: on Madison Avenue and social media marketing.
- What the Hell is Web 2.0: A unified theory of sorts (written for O'Reilly).