Twitter is the now quite rightfully the new kid on the block and why not?  It’s about time we had a new poster child for the so-called social web.  Like many startups it has a lot of users, is growing rapidly, and has a lot of VC funding.  What’s more it’s also has a distinct lack of a business model.  So that’s all the boxes checked then!

It was big news in the online world last week when a comment by one of the founders Biz Stone, to Marketing Magazine, in the UK, caused a lot of people to start speculating that Twitter would be charging users to have commercial account.  To be fair Biz moved quickly to confirm that Twitter will never charge users or companies for an account.  So just how are they planning to monetise all that traffic then?

Well, it’s probably worthwhile look ing at Google.  Back in 2001 they had a great search engine but no business model and look at them now.  Now I don’t for one minute think that Twitter is going to find a business model like Adwords or Adsense.  In fact they will probably be looking more to the Facebook model.  To some extend I think Facebook would have been the ideal partner for Twitter, and so did Facebook.  Mark Zuckerburg himself called Twitter “an elegant model”.  So why did talks break down between Twitter and Facebook. Well Facebook were offering $500m in Facebook stock, which is essentially paper money at the moment, and also over-values Facebook.  In addition the Twitter founders feel they have unfinished business with Twitter.

Below I’ve jotted down a few ideas for how Twitter could monetise the traffic and service they provide without charging users a subscription fee. 

1) Sponsored Tweets in your feed – Similar to Facebook sponsored feed ads.  This would be relatively easy to do but without the level of demographic data FB have Twitter would need to target it based upon what users are Tweeting / Favouriting.  Would advertisers like this, time will tell. Likelihood = 8 (out of 10)

2) Google Adsense / Banners - Easy win, convert all that traffic into revenue.  Only problem is it will be low yield and also many people use an App to bypass Twitter.com.  Might make an appreance but would be worrying if this was their best attempt at a business model. Likelihood = 8 (out of 10)

3) Self service contextual ad system.  Google Adwords is the best, Facebook ads it getting some traction.  This might require a redesign of the layout but there could be room for some kind of engagement ad as Facebook like to call it whereby people can engage with the content and retweet the advertiser message to their friends. Likelihood = 6 (out of 10)

4) Research tool – There’s a whole load of information floating about on Twitter as to people’s thoughts, experiences and perceptions of a companies products and services.  What if Twitter could charge companies for advanced statistics and analytics on what people are saying about them, on Twitter, in realtime. Check out my post on the real time web.  This is along the lines of the TechCrunch article, mining the thought stream. Likelihood = 2 (out of 10)

5) Facebook Connect / Google Friend Connect - Linking either of these systems into Google Friend Connect or Facebook Connect ID system’s will give both parties another level or targeting to tap into.  i.e. they would know what you are twittering and what you are searching for / what your demographics and interests are.  Advertisers would then pay a premium for this targeting.  Ultimately this relies on Google / Facebook selling the inventory. Likelihood = 2 (out of 10)

6) Classifieds – We all know what hashtags are right? Well we could have a slightly more user friendly system where people tweet their classified ads (would work great with geo-location), i.e. “looking for a housemate in Clapham, London, £600pcm, non-smoker”. You then pay a small fee for a listing in certain categories, or Twitter gets a small % share of the sale item if you were selling something ebay style. Likelihood = 4 (out of 10)

7) Get bought - Last option, is to sell up, take the money and run. Leave it to Facebook, Google or Microsoft. Likelihood = 6 (out of 10).

So there are some examples, but I guess we are all going to have to wait and see what Twitter come up with.  If you want some further reading Business Insider have run a competition with their users to create the best 11 commercial business model for Twitter.