Remember Second Life? It’s (not) living proof of how short lived Internet fads can be, especially for adults! Is the same fate awaiting Twitter? Just look at some of the ridiculous facts and stats: alerting thousands of people from the floods in the UK and fires sweeping across CA, soothed stressed families and fellow travelers from a holed (up) Southwest plane, allowed us to shop where Ashton K was at and enabled the “public” challenge to a theocracy. Add to that the 44 Million people who visited its web site in June, that it’s the online choice of the Fortune 100 and is currently valued at $1 Billion is not impressive: At a recent Twitter conference the entire audience indefatigably believed that it’s value would be far greater than Facebook ($6.5Billion) within 5 years!
Why all the frenzy given that Twitter’s current revenue is a poultry $4.4M with revenue projections of only $140M by 2010. Why? Because real-time web is bringing a revolution to the web as we know it and Twitter is a key player that represents a whole new world for users, entrepreneurs and investors. Real-time web is exploding because high speed Internet, smart phones and technologies that enable the instant transmission of data and messages are soon to be effortless and everywhere: Currently there are 800M PC’s on the planet, but there are 3.5Billion cell phone users equipped to use real-time web. Tweet that.
Is Twitter a fait accompli? The court of investor opinion is still out on how much value gets delivered beyond Twitter itself. Can Twitter make serious dough? The same question is relevant to all in the space. With Twitter, what people are tweeting and sharing can be a powerful indicator of their personal interests and purchasing intentions. Therefore, these tweets house a rich new body of data that is currently outside the reach of the search engines. As Kimbal Musk, the CEO of OneRiot, a real-time search service said, “Traditional search is like going to a library. Real-time is the right search, right now.”
“Traditional” search. That says it all, but Twitter has a real-time revenue challenge.
On the one hand they need to keep ramping up their users to provide value for existing members, but if they push too fast to generate revenue it scares users away and if they leave it to late the business could die. Twitter does not wish to charge users fees, but in addition to e-commerce revenues e.g. digital games, could they charge rent to those 3rd parties keen to be on the platform:
On the subject of free, the tweeting optimist said, “The glass is half full.” The Second Life pessimist said, “The glass is half empty” and the post MySpace rationalist said, “The glass is twice as big as it needs to be.”
Ultimately it’s all about abundance versus scarcity. The new economy is about abundance whereas the old economy is about scarcity. Bundle these together and we could have some very interesting business models going forward.
PUNCH & KISS 