Twitter No Solid Business Model Yet

March 30th, 2009 at 12:00 am

Twitter Logo

With the growing popularity of the micro-blogging site Twitter, one might think that the site has already started earning profits from its widening audience of users and visitors in one way or another. But it seems the opposite holds quite true for this site. The people at Twitter still have to develop a solid business model that would help it at least earn back what capital it has already spent on its development.

The sense that Twitter may not yet have a business model to earn income from the site may well benefit its users. But then, how can any type of business stay afloat and improve if it does not have a source of revenue? Angel investments can only go so far, don’t you think?

It has been about three years since Twitter began offering its service. And along the way, it has gained quite a collection of users, most notable of which is the current US President, Barack Obama. Pres. Obama has been known to have "twittered" his way on the campaign trail and eventually win the presidency. Despite this, it may seem a surprise to many that Twitter only have started thinking and planning of creating possible income streams only this year. Can the last three or two years be a case of the site’s overlooked profit potential?

The fact that Twitter has enjoyed phenomenal growth even this early may have prompted its backers to have started looking into its profit potential even earlier. And considering that creating new ideas and developing possible potential areas for profit for such online sites can be tricky and downright challenging, any new contrived business model might still be in the developmental stages and may not be available any time soon.

And while Twitter might still be doing this, many other companies have already seen its potential and may probably be making money off it. For example, Dell has been using Twitter to make discount offers available in Tweets as well as get in touch with their customers better. That is just one of the many companies that have since taken advantage of the potential of Twitter to improve their bottom line. Too bad Twitter is not as fast.

But if Twitter does develop a potential business model sometime soon, it should not try to alienate those users who made it as big as it is today. The users still rely on the free service that it offers as it main "selling" point. People may not be as attracted to it if its service is being offered for a fee.

Who knows, Twitter may yet stay free of any business models and still thrive by virtue of its growing popularity. This alone may make it attractive enough to be considered by other corporate giants out there for a possible buyout. Point in fact- the popular online video streaming site, YouTube, did not earn any revenue from its service up until it was bought by Google for a staggering US$1.65 Billion in 2006. That might be something that Twitter is trying to look forward too.