Less seems more these days. Google Adwords became one of the largest online advertising platforms by restricting advertisers’ copy to 95 (25 line 1, 35 lines 2 & 3) characters or less. Twitter has become the fastest growing media platform through a 140 characters-per-message limit. Twitter’s internal valuation has reached a stagerring $250 million.

Regardless of the hype behind Twitter, one its strengths is the speed at which it disseminates and shares information from the mundane to the highly relevant. Whole Foods is taking advantage of this dynamic, by catering to consumers with special interests and needs through Twitter. Another strength is the simple but effective API that has driven the development of countless third-party apps including TweetDeck, Twitteriffic and Twhirl.

Twitter is nothing more than another attempt to blend real-time communication and search within a social media context. Before Twitter there was Jaiku a Nordic social networking, micro-blogging platform launched in February 2006. Jaiku was purchased by Google on October 9, 2007 and shortly after decommissioned.

There is certainly scope for this type of integration, yet there are those that seem to have forgotten lessons from a decade away –claiming Twitter is a threat to Google and Facebook, (after all Google’s search index doesn’t keep up with conversations as quickly as Twitter and its user base is growing exponentially). As we learned during the dot-com bust, the value of technology and a user base is not in its ability to become mainstream, but the ability to be monetized. Why? Simple – profitability drives sustainability, R&D and innovation.

Twitter has four options to monetize its audience and build a profitable business model – advertising, subscription, research and apps download.

Advertising. While Federated Media recently announced an advertising revenue share program on Twitter creating programs such as ExecTweets, a collection of tweets from Microsoft executives, advertising will not be well received by Twitter users unless they are really clever about they way they engage this audience – few companies have been able to do so.

The latest attempt to build an advertising model is in the launch of The Discovery Engine brings real-time Twitter search right into the home page sidebar. When a user conducts a search, the results appear there, too, popping up in the big white box instead of on a new page. Users can also track the hottest trends on Twitter at any given moment within the same space. Think of it as Google Alerts for Twitter, built right into the site. The problem is that most people may never even bother discover it. How often do users actually use the Twitter.com interface?

Have a look at the latest Toyota ad on Twitter Japan. This model might become the norm for Twitter – make money from overseas markets while keeping the US version free.

Is there scope for search based ads, a’la Google Adwords on Twitter? There is, but while the ads would reach a large audience, their relevance would be poor. Revenue-sharing ad network Adjix has thrown its hat in, by launching an ad format that lets users embed text ads within “tweets” (Twitter posts). User can post small text link appears at the end of their tweet. As Kayte Kaye from Clickz reports “the value of search marketing lies in its ability to reach people who are seeking information, on Twitter, people are pushing out information as opposed to looking for information”.
Subscription. While successfully deployed by a handful of community sites including LinkedIn (Personal Plus and Pro), it would be challenging to justify the cost to the average consumer. With established media outlets such as the New York Times and FT.com struggling to make the “pay to consume” model work, Twitter does not stand a chance.

Research. While Twitter could be used to monitor and track the conversation and word of mouth of its user base, it would not only end up competing in a space dominated by aggregation of word of mouth (Technorati, Brandwatch) and more importantly, end up killing the spontaneous and “information promiscuousness” of its user base.

Apps Download. A promising model for Twitter based on idea of offering “power users” – mainly those in the PR industry – unique tools and applications at a cost. Case in point, CRM provider Salesforce.com recently launched a Twitter application costing $995 per month which allows its users to post and manage Twitter content. Yet, this model in itself cannibalizes the concept of equal access and influence, which is so important to social media.

Our friends in the industry have lots of different views on the future of Twitter. In an interesting exchange our friend Tim at Reactive brought up a good question – Is the question how will “Twitterers” make money from the service, or how will “Twitter” make money? What we all agree on is that the video Flutter, the next Twitter, is recommended viewing.

Sooner than later Twitter will have to choose between either remaining the Peter Pan of social media or stepping into the world of social media adulthood. The decision is likely to end up killing Twitter.

About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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