Twitter's new plan: Commerce?
Twitter CEO Dick Costolo discusses the company's business model, the departure of its co-founders, and its future in advertising. — By Dan Primack, senior editor — Dick Costolo — FORTUNE —Almost from the moment the first 140 characters were tweeted …
Context & Ripple Effects
Twitter had already moved from audience-building into selling advertising and had announced Promoted Tweets for users’ timelines. Costolo’s earlier call for developers to move up the value chain came amid a confirmed strain with outside app makers, making control of the user experience central to monetization.
Commerce is only reported as under consideration, not announced. But the possibility matters because it would extend Twitter’s business model beyond ads while the company is also addressing co-founder departures and defining its relationship with developers.
First-order effects
- Twitter’s advertising team gains a potential second monetization path if commerce moves beyond consideration, using the same user attention that Promoted Tweets seek to sell.
- Outside developers face greater uncertainty over which commercial features Twitter will reserve for its own products, given the already strained relationship between the company and app builders.
Second-order effects
- Advertisers and merchants would have reason to seek placement closer to purchase activity, raising the value of Twitter-controlled timelines and interfaces over third-party clients.
- A tighter hold on commercial surfaces would push developers toward complementary services rather than building features that overlap with Twitter’s revenue plans.
Third-order effects
- If Twitter combines sponsored messages with transactions, social conversation becomes a distribution and purchase layer rather than solely an audience for display-style advertising.
- The broader platform pattern is revenue capture shifting toward the company that controls the core user interface, even when outside developers helped expand the ecosystem.
The trend: Twitter is testing whether high-frequency conversation can support both advertising and transaction-oriented monetization under tighter platform control.