People have been speculating on how Twitter is going to make money for what seems like forever. This slideshow from Fred Wilson, a venture capitalist with Union Square Ventures (which has invested in Twitter), features a screenshot that may signal how it's actually going to happen.
Slide 22 simply reads: Where We Are Going
And from what I can see, I like the direction that Twitter is going in here, and think it makes a lot of sense.
Making the profile experience central
Bringing Twitter search into the profile experience is a huge no brainer, and something long overdue stemming from the acquisition of Summize in July, 2008. Twitter search is a fabulous way to pick up trending data about what people are chattering about right now, amongst many other uses, so it makes all kinds of sense for Twitter to base their monetization strategy around this killer app within their community's midst.
Adding value, not just adding ads
I think I've probably screamed louder than anyone else for two years that Twitter should simply (for starters, mind) throw a 728x90 ad banner at the top of every single Twitter profile page. Even at a ridiculously low CPM, or so my argument went, you're at least paying for some bandwidth at that point.
Well, Twitter ignored me, and maybe that's okay. (I said maybe!) I really like that the emphasis – at least on this slideshow presentation – is on bringing relevant and trending data to the user through Twitter search in real time.
Having an Adwords-like system that lets advertisers pay to insert featured and matching user profiles based on keyword searches is a great idea. (And just maybe that's why Google CEO Eric Schmidt dropped some snarky comments today about Twitter being a "poor man's e-mail system?) I've always felt that ads stop being annoying and negative exactly at the moment and time when you're delivered something that you actually want, and this is an opportunity to do just that.
Trending topics and nifty queries
It will be interesting to see how or if Twitter will attempt to make money off of featuring "trending topics" and "nifty queries." This could be an opportunity for advertisers to partner with Twitter for creative integrated campaigns. Think "win a Honda by tweeting your favorite thing about it," with associated campaign hashtag, except more creative!
Harrison Hoffman at Webware notes:
We have known that integrated search has been coming for some time, and Biz Stone even wrote that it Twitter would start testing integrated search in February, so this is no shocker. It is interesting to see how the microblogging service might be going about implementing it, though.While the page design and UI may get fiddled with before final deployment, I think we're finally starting to see Twitter's revenue model come into focus. And in this current economic climate, you'd think they'd want to get started on the making of the money sooner rather than later!
I have to note that in comparing Biz's small screen capture in the Twitter Blog post linked above to this one from Fred Wilson's presentation, it appears that Wilson's shot might be older, so Twitter's integrated search might look different in its current state.
Read more by Eric Berlin at Online Media Cultist