Twitter is the social network that half the world is going crazy about right now. The British media can’t seem to get enough of social networks, such as Facebook, but Twitter appears to be the favourite of the month. Hardly a day goes by when the BBC doesn’t have an article on their Technology News site where they don’t mention Twitter.
Just incase you have been living under a rock for the past few months, here’s a bit of background behind Twitter. Twitter is an online social networking application that just asks you one question, “What are you doing?”. The premise behind this is to keep those who want to know what you’re up to, informed. As it has once been described, Twitter is what happens between blog posts and emails.
In all honesty Twitter has been around since 2006, it’s only recently that the traditional broadcast media has cottoned onto it. A few months ago some celebrities, such as Stephen Fry and Jonathan Ross began to use the service; with their media influence there has been a sudden explosion of interest in Twitter. This fresh explosion in the social network has unearthed the age old question that has been plaguing Twitter since its initial conception. How on earth is Twitter going to monetize?
Personally I hate the word “monetize” but I think it’s perfectly apt for this post. “Monetize” is a word that’s been floating about since the .com boom of the late 1990s. Business men and women see a new technology and start to wonder how they can make money out of it, how they can “monetize” an existing technology or service.
Usually, with online social networks and services, the typical way to monetize is through selling premium rate advertising on the network or service. Many current social networks already adopt this form of funding, in fact advertising is pretty much the biggest element that’s keeping the internet a float. Google makes money out of advertising, Yahoo supposedly do, Microsoft are attempting to, Facebook is leaning in the direction of selling advertising and many blogs and podcasts have adverts littered throughout them (although not THIS blog, for various personal choices).
The general feeling amongst the online tech world is that Twitter shall eventually follow the rest of the crowd and monetize using advertising. Current suggestions of how Twitter could implement advertising include displaying targeted adverts, that pick up on key words or traits, in between tweets on a user’s personal stream; very much like Google does with their search results (which leads onto another rumour about Google buying out Twitter). However many feel that this will disrupt the way Twitter works and that it wouldn’t really be an effective way of monetizing the system.
Twitter is unique in the fact that it has one massive obvious way that it can make money. People implement Twitter EVERYWHERE by using Twitter’s extensive API. The API that Twitter provides means that third parties can create applications that integrate with the social network. Whether it’s to build a simple Twitter desktop app, to analyse stats, or a plethora of many other possibilities, the Twitter API allows a third party to do this. So many people are coming up with exciting and fresh ways os using Twitter, through the API, that a single way to monetize Twitter seems to have appeared.
Thousands of dollars a day are poured into Twitter to keep it functional. Their server farms require electricity, cooling, security. They have to pay their engineers and keep their shareholders happy. A few months ago Twitter was struggling to meet with the demands of their ever expanding audience; servers were failing left, right and centre and the service became awfully unreliable. However, very few people were actually logging on to Twitter.com and actually using the site. The increase of traffic was coming from third party applications making use of Twitter’s API.
An interesting solution to monetizing Twitter is to charge for the use of their API. If Twitter were to start charging developers to access their API, Twitter might have a viable financial solution on their hands. An entire universe of third party applications that make use of the Twitter API exist, it’s part of the reason why Twitter has managed to survive when other similar social networks haven’t. Twitter integrates with everything and has become an incredibly powerful tool. It seems incredibly silly not to start charging for API access, now that the network behind Twitter has built up. Other companies and services are making use of the API, which is currently losing Twitter money. This would also be an effective way of avoiding charging users of Twitter for accounts. To me, it all seems perfectly logical. I have no idea though how much, or how, one would charge for API access; it’s just an idea.