Saturday, September 11, 2010

Twitter Remains Not Profitable

Twitter might be a great service and experiencing an awesome growth, it is still struggling to become a profitable activity. I found this video on CNN website.

I really dislike when Dick Costolo says "we have plenty of time to be profitable". Twitter has been created about 3 years ago, and their lack of business model remains scary. You can not create a company without a clear view on how you are going to generate a profit out of it. It was clear for Facebook they would be able to leverage the large amount of user informations they have, on top of course of the large amount of visits they have. Google has created a search engine which was easy to turn into a cash machine by keyword advertising.

But Twitter don't have much of it. Now, I have seen promoted tweets, and it does not seem to be a bad idea, but I remain skeptical about its ability to develop on the long run.

They have though good ideas about how to monetize Twitter by making it easier to convert Twitter conversations into transactions. As we have seen, Dell has been generating some sales thanks to Twitter. It seems that Twitter have good chances to turn into a distribution channel.

It seems to be a great way, as other Internet tycoons as Facebook and Google are putting large amount of money on the table to add some Internet retailing service to their platform.

Now, Twitter's optimism remains to me a non sense:
  • Their service is failing way to often, and actually, right from the beginning it has been developped on wrong basis, which makes it difficult to improve its consistency.
  • They are struggling to get mass marketing usage. It remains a tool for geek, celebrities, business man and some other high end people, but without a massive usage, as Facebook gets, it will be difficult to drain some interest of brands.
  • Getting a lot of users, and raising the usage of Twitter is great. But having a clear vision on how to monetize it on the long run is a lack of strategy.
Nothing in this interview actually convinced me.