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Will Twitter's 3000% traffic growth make it any money?

Rebecca Thomson

Twitter is seeing extraordinary levels of growth, with recent figures putting annual increases in UK traffic at 3000%.

Celebrities such as Stephen Fry and Britney Spears - not to mention Barack Obama - have provided the site with publicity boosts, and it now gets more hits than the UK's main national newspapers.

But it remains to be seen whether the company can make much money from its spectacular growth.

The company does sell unobtrusive text advertising for its pages, and co-founder Biz Stone has confirmed Twitter plans to offer paid-for packages of extras for businesses.

He told Silicon Valley Insider, "Commercial entities such as Whole Foods, Starbucks, Mission Pie, 52 Teas, JetBlue, even the Korean taco truck guy are all Twitter users and businesses alike are finding value.

"Our question is, how can we help? What can Twitter offer for a fee that will improve the experience?"

But social software consultant Suw Charman-Anderson thinks this might be too little too late.

"If that is what they are relying on, they are treading on thin ice," she said. "They have got a huge amount of education to do in the corporate world."

It is difficult enough to communicate the benefits of Twitter to individual users, let alone big business. It is only once people are using the site and interacting with people that they can see the benefits for themselves.

"The corporate world is very sceptical of social networking in general," she said. "And Twitter is the hardest sell."

The company has missed several possible opportunities to make money, including the potential of selling cheap add-ons and iPhone applications for a couple of pounds a time. Loyal users are lining up to tell bosses what they are prepared to pay for, but the company seems to have missed many of the opportunities.

Charman-Anderson said, "One of the great mysteries of the last year or so has been Twitter's business model.

"The problem is that there have been a lot of models that they could have pursued, but they have not, and other people have done it."

She cites the free SMS service which Twitter used to offer. Instead of starting to charge for sending SMS messages, it simply stopped offering the service. Now other companies offer paid-for SMS bundles. "So that was a revenue stream that they decided not to pursue", she says.

Likewise with internal business communications - Twitter could have put together a version of the service that businesses could buy and install. Instead, they now have services like Yammer.

"There are all sorts of things they could have done but didn't," Charman Anderson said. "This means they have either got some secret idea that relies on huge amounts of people using the service, or there is a lack of clarity on their part and they have missed a massive trick".


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