Click to Save up to $300/yr on callsWill the twits pay for their tweets? Nope
CNET News.com Editor in Chief Dan Farber suggests a new way for Twitter to make money: Charge for the right to "tweet." Reasonable, right? If you derive value from a service, you should pay for it, right?
Maybe not. The primary problem with this idea is that people have come to expect software and associated services to be free. They don't want to pay.
In open-source software, it's exactly the same: Tons of value, but would-be customers will pay as little as possible for it, unless forced to by a proprietary license or company policy (requiring one to pay for support).
As I noted before, we often don't want the consequences of what we want. Perhaps a consequence of no viable business model for Twitter is that it goes out of business or becomes a minor service for a major Web company. That may well be the best it can expect.
It's interesting that Web companies are struggling with many of the same issues that open-source companies are: when you give your product away for free, you have to find something compelling for which people will pay money. On the Web, that's advertising, but not all Web businesses lend themselves well to ad-based services.
In open source, it's support and perhaps proprietary add-ons that bring home the revenue but, again, support and add-ons don't fit equally well across the spectrum of open-source businesses.
I'm not pining for the world of proprietary software and proprietary Web services. That's a world that hordes innovation and charges by the drip. I'd much rather have the opening world we live in now. But we need to discover better business models to fuel it.
We're not there yet. I couldn't care less if Twitter dies tomorrow because I find it largely irrelevant to my life, but I'd still like for its developers to find ways to monetize it so that those who do like it can continue to enjoy it. Along the way, perhaps they or others will discover how to make money from all this free stuff. I pray that advertising is not the answer.
Matt Asay is general manager of the Americas and vice president of business development at Alfresco, and has nearly a decade of operational experience with commercial open source and regularly speaks and publishes on open-source business strategy. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.
The only way to monetize it as is are the two ways that you mentioned: people pay for the service, or ad revenue. Paying for it probably won't work, another free communication channel with similar features will pop up to take all the users, rinse and repeat. Ad revenue models are a really shaky way to build a Web 2.0 business. They're great (or well, at least work) if you have a site which people spend time on a page going through, like a search engine, publication or blog. But as evidenced by Facebook's Beacon, if it interrupts communication, it won't work.
Given those two options not being feasible, or Twitter fading away, I'd much rather a company buys it for goodwill/marketing purposes. I think a good fit would be Yahoo. Yahoo is embracing openness, and also trying to become relevant again and a more central hub. Imagine, Yahoo! Twitter, it would give Yahoo a feature that would draw millions of users interacting constantly on it, and also a lot of goodwill. As long as they can resist the allure of those "ad revenues."
Twitter should have learned something from all the dot-bombs of 2000: many of which were sites that offered something cool, but didn't have a concrete way of making money off of it.