Twitter may charge companies that 'tweet'

Update at 4:30 p.m. PST with an excerpt from Twitter's afternoon blog posting clarifying that it doesn't plan to charge for "existing services."

It seems that Twitter may have figured out a way to make money.

Biz Stone, co-founder of the microblogging site, told Marketing magazine that his company is considering charging companies that use the service to market their brands.

"We are noticing more companies using Twitter and individuals following them," Stone said. "We can identify ways to make this experience even more valuable and charge for commercial accounts."

While he declined to discuss how much Twitter would charge, Stone did say that individual users would not be charged.

Twitter said in a blog posting Tuesday afternoon that it would "remain free to use by everyone--individuals, companies, celebrities, etc.":

What we're thinking about is adding value in places where we are already seeing traction, not imposing fees on existing services. We are still very early in the idea stage and we don't have anything to share just yet despite a recent surge in speculation. When we do, we'll be sure to let you know.

Several companies have found a new revenue stream trickling out of the service. Fire-sale start-up Woot showed that it's possible to take advantage of Twitter's rapid-fire nature to advertise fleeting deals; shoe retailer Zappos has gotten praise for using Twitter for customer service. Low-cost airline JetBlue also uses Twitter for both fare deals and customer service.

PC maker Dell, which has 80 different Twitter feeds and about 11,000 followers, has been experimenting with the service as a tool for customer service, public relations, and now advertising. Dell revealed late last year that its "Twitter sale alerts" have added up to about $1 million in revenue.

However, Bob Pearson, vice president of communities and conversations at Dell, is quick to point out that it isn't dependent on the service.

"If it becomes complicated and costly, our instinct would be to move elsewhere," Pearson told the magazine. Other companies questioned about such a pay-to-market scheme gave the magazine similar responses.

The idea has been floating around for a while. Last October, my colleague Caroline McCarthy reported Twitter was mulling the idea of offering premium accounts for businesses that want to use it as a marketing tool, and that its acquisition of search tool Summize may start to play into an advertising model.

Twitter closed a $15 million funding round in May, bringing it total funding to $20 million, and is thought to be worth close to $250 million.

[mjconver]

What?!? It's worth a quarter billion dollars? You have got to be kidding, I want some of what those idiots are smoking. Twitter is Web 3.0. That's right, the sum of Web 2.0, Ajax, plus Web 1.0, worthless business models that burned up a bunch of investor money.

[HenryElliss]

I wrote a blog post yesterday on a very similar angle - what is going to happen to Twitter when all the celebrities who are currently flocking to it, get bored?

http://tinyurl.com/cq6jmv

I can't say I came to a firm conclusion, but I'm pretty sure that if investors have jumped on board by that point, they're going to get a bit of a shock when the fuss dies down again...

[fakturist]

FAIL!

[Harrison912]

I'm a web site owner of safety and security products using Twitter for marketing purposes too. Paying for something that is free is definitely not appealing so I'd have to see what kind of "value" Twitter plans to offer for what kind of price.

Thanks, Steve for this great information.

[thedailyanchor]

FYI, I met w/ one of Twitter's co-founders yesterday and he cleared up the static around this rumor... Twitter is not planning to charge companies a fee for using the existing service. They're taking their time to find the right revenue model that will add value to the site, not detract.

Article is here:

http://www.thedailyanchor.com/2009/02/12/a-conversation-with-twitter-co-founder-jack-dorsey/

[paulimusmaximus]

Am I the only one who thinks Twitter is total garbage anyway? It's impossible to find any of your friends on there unless you know their user name. It's like myspace where all these people and companies you don't know try to follow you, and the layout is terrible. I mean I can already see what my friends are doing with facebook, which is laid out better. And I can see pics and other stuff if I want to. Plus it's just another site I have to log into and read. I can't see how anyone except a teenage girl would find this site remotely fun to use, or useful in any way.