Twitter VC Laughs at the Idea that Twitter Has No Business Model

Were you expecting him to say:<p>"Actually, Twitter has no business model, and their mindshare will evaporate as soon as they start charging. We're truly boned, and our only hope of profitably exiting this deal is to unload it on a bigger sucker. Sadly the big suckers are hurting for money at the moment, and unlikely to try running another major site as a public utility, which is annoying because despite the fact that the web part is nearly free those SMS charges for 180 character messages are nearly killing us. So basically we have to keep up a facade to justify our valuation per user of about $75, which is about equivalent to the present value of, say, a WoW player, despite the fact that they have proven their willingness to pay money every month, are intensely engaged with the service, and have low churn rates -- absolutely none of which we can boast of. Oh, God, somebody please hand me a martini."<p>?

Twitter can monetize anytime. They have a huge number of options, because the size of the userbase makes it possible. Even silly things will work.<p>For example, let's say it costs $1 to write a twit that snoop dogg will actually see. A percentage of his fans will do so. Spread that across the thousands of people who have a huge number of fans, and you already have a revenue stream. Combine with a number of other things, and it here will all become quite profitable.

So why haven't they implemented it already? If its something so genius, what are they waiting for?

The web these days is full of applications that do cool things but don't provide a hint of value to end-users that makes it worthwhile to pay. One suggested option for Twitter to monetize on was charging for premium membership (<a href="http://calacanis.com/2008/01/02/the-three-business-models-that-make-twitter-a-billion-dollar-bus" rel="nofollow">http://calacanis.com/2008/01/02/the-three-business-models-th...</a>), the one option so far that seems to be in line with traditional business models: provide a service that people are willing to pay for. The blog post suggests 1-5% of users might subscribe to some kind of premium membership...I think more along the lines of 1-5% of active users, which drastically cuts the number of potential subscribers down. Bottom line: advertising might be Twitter's only hope, but I predict limited success (in the long-run) unless Twitter finds a way to produce a service they can put a price tag on.