Did I Speak too soon about Twitter?
No sooner did I ask "what's the business model?" for Twitter, than a commenter said this:
Let’s assume that there are 20,000 people on Twitter who have added Starbucks as a Friend in order to get a few promotions a week - e.g. a free cookie with your coffee, a free tall coffee, etc. If Twitter charged Starbucks a few cents per tweet per follower, the revenue from Starbucks might looks something like this:
20,000 followers
10 tweets (promotions) per week
$.05 cents per tweet for each follower (maybe more???)
that’s $10 K per week or about $40K per month
I have no idea whether they are thinking along those lines, but they should be.
Update: This needs to come up from the comments to this post:
For example, what if Starbucks put up signs in their shops: "give us your mobile number if you want to receive text alerts of our newest specials"? Suddenly, they can reach most of the same people without the middleman's markup. I think the people behind Twitter have not really thought about just how far disintermediation has gone already, or how far it is likely to go in the future.
So it's back to my first thought - the Twitter business model is "get bought".
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Comments
Hopefully, there is no way to go around them, or ...
[W^L+] March 22, 2007 19:05:54.296
Assuming, of course that Starbucks doesn't just attempt to go around Twitter and hit those people directly ten times per week. I think that it would get old really quick, like the old Jelly Belly promotion of trying to be one of the people who got free jellybeans. It only took two or three months and I have never been back to their site.
For example, what if Starbucks put up signs in their shops: "give us your mobile number if you want to receive text alerts of our newest specials"? Suddenly, they can reach most of the same people without the middleman's markup. I think the people behind Twitter have not really thought about just how far disintermediation has gone already, or how far it is likely to go in the future.
I think you were right: Twitter's business plan must be to get bought by someone with deep pockets.
W^L+
Intermediation has its uses
[sean] March 23, 2007 12:19:15.138
How many people will hand out their mobile number if SBUX says "let us spam you with 'valuable offers for products and services'"? Most people detest junk mail, telemarketing, and spam, so they'll be reluctant to just lie down for some retailer. But say you (1) have them sign up for a free web service with a cute name and pages of unreadable legalese as a EULA; (2) have them enter contact information there; and (3) offer a few freebies from various retailers with that service. Then you have eased them into giving away contact information they might guard more closely by operating through a middleman.