A revenue model for Twitter

At RWW, Bernard Lunn asks readers to suggest a revenue model for Twitter, that satisfies two criteria:

1. Do not irritate/interrupt the user and even occasionally add value to the user.

2. Provide a value proposition that is so compelling that even conservative buyers give it a try.

There’s actually a fairly simple solution that meets the criteria above, and it relies on a relatively new feature that Twitter introduced primarily for the 2008 presidential elections: selling ad space on topics pages. The common topics pages are candidate-specific ones like “Obama” or “Palin” but there are also new topical ones being generated such as “Muslim” or “Colin Powell“. Note that these topical pages, unlike the candidate pages, are dynamic and fade into and out of existence based on the real-time activity of twitter users, so these truly are a snapshot of current discussion rather than any kind of archive or comprehensive index. There’s even a “tag cloud” at the top of the main election page that shows what the current topics are and the topicscan be filtered by candidate (for example, “Obama and muslim“)

These topics and candidates pages are election-centric for obvious reasons, but there’s no reason that they can’t be expanded in scope, analogous to the breadth of various topics at alltop.com. The crucial difference here however is that the content is entirely user-generated tweets rather than RSS feeds of news and blogs, and is presented as a real-time “river” of information.

So, then, how to monetize? Simply, to imitate Google, and sell ad space on the topics pages. Twitter could even partner with Google or Yahoo and share the revenue. Imagine a partnership with google, for example: adwords purchasers would buy ads for specific keywords, and if/when those keywords become Topics at Twitter, their ads would display. Likewise, contextual ads based on the real-time river of tweets for a given topic could also scroll by in the sidebar, or appear interspersed.

The point here is that Twitter has created instantaneous portals for the hottest topics of the day, and what makes it so useful as an end-point destination for websurfers is that the twitter users are generating the content, providing both links and commentary. So, the real estate created by these topics pages has real value for advertising, as long as it is contextual and targeted. But targeting is easy because instead of having to analyse the entire webpage (as Adsense does at present), the contextual algorithm has a head start because of the topic itself. Then the remaining contextualization can be done on the river of tweets for fine-tuning. This should ensure better relevancy and higher click-through overall.