Twitter's Business Model
I woke up this morning and found a twitter message on my phone from chris herbert pointing me to this discussion of twitter's business model on techmeme — That's the tiny url that chris sent me. I hope it works. I'm still limited to my blackberry for internet here on the great barrier reef
Context & Ripple Effects
Twitter opens 2008 with its monetization question suddenly unavoidable: a Techmeme-threaded debate on the company's business model has pulled in the CenterNetworks 'Is Twitter F'ed?' critique the same day, while Jason Calacanis argues on his own weblog that three identifiable models could make Twitter a billion-dollar business.
The A VC post matters less for its content — dashed off from the Great Barrier Reef over a BlackBerry — than for who is writing it: a prominent venture voice treating the business-model debate as worth flagging to his readers, which signals the question has moved from blog snark to an issue Twitter's backers cannot leave unanswered.
First-order effects
- Twitter enters 2008 under a public framing problem: the same-day Techmeme discussion pairs skeptics asking whether the service is viable at all with bulls like Calacanis pricing it at a billion dollars, leaving the company's own silence as the story.
- Investors and commentators, including the A VC author, are now spending attention cycles on Twitter's revenue gap rather than its growth, raising the cost of every week the company goes without an answer.
Second-order effects
- Rival and adjacent free consumer services get dragged into the same test — if Twitter cannot explain how messaging-at-scale pays, funders will demand a monetization story from every similar startup before writing checks.
- The debate hands Twitter's eventual revenue announcement a ready-made audience: whichever model the company picks will be measured against the specific alternatives already circulating in this thread.
Third-order effects
- If the pattern holds, 2008 marks the point where consumer web services stop being excused from revenue questions by user growth alone, pushing the industry toward monetization plans disclosed earlier in a company's life.
- The episode also cements Techmeme-style aggregation as the arena where a startup's viability gets adjudicated, making narrative management part of running a high-profile free service.
The trend: Free consumer messaging services are crossing from growth-story immunity into public monetization scrutiny, with investors and aggregators forcing founders to defend a revenue path in real time.