Wednesday, June 17, 2009

Who says Twitter doesn't have a business model?

Is it possible Twitter may have finally stumbled into a way to monetize its business? Well, maybe.

According to Reuters, over the past two years Twitter reportedly helped Dell sell over $3MM in products to its Twitter followers who were directed to Dell e-commerce sites from posts they placed on Twitter. Dell, apparently, posts on Twitter several times a week and offers up coupons and promotions to its followers (all 600,000+ of them).

While $3MM for a company the size of Dell isn’t exactly a groundswell, it’s something. And although Twitter is not charging Dell for these referrals it hasn’t ruled it out as something they might consider in the future.

Maybe this is the beginning of a vertical application strategy for Twitter where developers using the Twitter API build apps for companies to hawk their wares in a way that generates Twitter fees (e.g., either on a licensing or per transaction basis).

Another strategy that has been kicked around has Twitter monetizing itself by selling its platform as a tool to track public sentiment about a brand (a product, service, politician, or what have you) or other topics of interest to researchers. The problem, at least as I see it, is that the very free nature of Twitter seems at odds with this approach.

Finally, others have suggested that Twitter be used as a vehicle for delivering targeted ad messages to its users. Whether these would be served up in the context of tweets (which seems problematic) or in custom applications built using their API (which seems more promising) is anyone’s guess.

Whatever the approach, the enormous number of people who use Twitter and the passion in which they monitor their messages makes it an incredibly value platform. Now all it needs is a strategy.

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