The Times runs a piece today citing a media analyst at Sanford Bernstein claiming:
…monetizing Twitter “would be difficult at best and likely unsuccessful.” People who sign up for free services tend to resent a company for trying to wring revenue from the business later. Subscription fees are out of the question, they said, and advertising-based revenues don’t seem to have yielded enough cash flow to make a Web 2.0 property viable.
I agree about one thing – building ad platforms like Tweetsense will be difficult. But nothing valuable is ever easy. Adwords was not easy. Overture was not easy. What Facebook is building is not easy. And TweetSense won’t be easy.
But that’s the point, isn’t it? If it was easy, everyone would do it.
To be entirely clear, Twitter has at least three major potential revenue streams.
1. Tweetsense – AdWords and AdSense like platform for Twitter. This has major scale potential.
2. Branded licensing. This is stuff like Stocktwits, where Twitter could promote and perhaps gets licensing fees.
3. SMS/carriers – deals with carriers to split revenue driven by mobile tweeting.
And there are plenty more.
Analysts who write stuff like this are clearly not thinking very hard about the potential of services like Twitter, nor do they understand the appetite for risk the venture capitalists backing such ideas have. Check this quote:
“Whoever buys Twitter, they wrote, “will likely have to operate it at a loss in perpetuity, or until the next cool Web 2.0 social networking concept comes along and Twitter tweets no more.”
Utterly ridiculous on so many fronts it’s hard for me to summon the energy to refute it. The idea of the tweet as the query, the idea of brands wanting to have a commercial “response” to searches (and tweets) on Twitter, these are not small ideas. The idea of real time search, conversational and social search, real time “AdWords” – these are not minor new wrinkles. They are here to stay. Twitter is a very promising service directly in the center of these trends, trends the “analysts” at Sanford Bernstein clearly do not grasp.