July 16th, 2008
Twitter going commercial?
According to Mike Arrington, there is a commercial play for Twitter in the works. During a conversation with Ev Williams, Twitter co-founder:
MA: What is your revenue model? Do you know yet? Have you thought about it?
EW: We’ve thought about it. We had to do some thinking about that to raise a bunch of money, but it’s not actively in development right now. The broad strokes on the matter are obviously Twitter is being used for a lot of commercial purposes right now, in addition to social purposes. We think that works pretty well. We think there’s a lot of companies that we’ve talked to that seem to be getting a lot of value out of it. If that continues, if that becomes a rich world for users and the companies, we think we can extract some revenue from that.
MA: It might be difficult to define commercial activity versus not, right?
EW: It might in some cases, but in a lot of cases it will be really clear. I mean Woot.com is selling stuff. So maybe we just say, this is commercial usage and you need to pay for that and maybe there’s some features you get on top of that, that wouldn’t be as meaningful to personal users. There’s other cases, like yours, is that commercial or personal?
This is something that I’ve seen as a no brainer for a very long time. I know the VCs like to think in terms of millions of users in a consumer setting but that isn’t where the money lays. What’s more, Twitter is proving remarkably sticky as a business communications tool. Craig Cmehil (appropriately) Tweeted that:
@maggiefox a replacement to email for it is in many cases but limited to a few people in that case - twitter reduced email for me in gen 27%
That factor alone is worth money to someone. But I don’t think it’s Twitter - at least not right now. However, the company will have many hurdles to overcome if it is to reach that revenue generating Nirvana. Apart from the well rehearsed technical issues, Twitter will find that others are already developing clones. Skittr for instance is one such:
How hard is it to build a highly scalable social messaging system? Not hard if you use the right tools. Over the last week and a half, in my spare time, I wrote a Twitter clone in Scala and lift. It’s 884 ‘wc -l’ lines of code including comments. It can handle 1M+ users on a two Intel Core 2 Duo boxes (one as the web front end and the other as the message broker.) With a weeks of full-time coding, it could be modified to scale linearly with the number of boxes in the system.
If it’s that easy then a commercial offering could become the subject of almost instant price wars. Or worse still, smart engineers inside large companies just go do it themselves. The trick comes in figuring out what Twitter needs to license in order to become a commercial success. One clue comes from the many applications that are out there already. Other clues come from the way these types of service can be shoehorned into business processes. It will be interesting to see the next steps in this ongoing tech soap opera.
Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.
