The economic meltdown and accompanying advertising slowdown is the best thing that could happen to Twitter, much the same way that Google benefited from dot com bubble bursting. Had the dot com bubble not burst, Google’s business model would have been to slap Doubleclick (version 1.0) display banners everywhere. Instead, the bubble burst, display banner went bust and Google pioneered borrowed ripped off and scaled GoTo.com Overture’s pay per click model.
The rest is history: today Google owns Doubleclick (version 2.0).
When Twitter first began to take off, I wrote that Twitter should lose the “Google envy” (to build a ubiquitous online advertising model) and focus on what its natural disposition was: e-commerce and referal. Read more in Twitter’s 140 Problems.
When you see its most popular users include brands such as Zappos, you realize that this is Twitter’s niche anyway, and that forcing “yesterday’s ad model” into the product would only hinder its growth.
Now, I will say this, if Twitter were smart, it could leverage its fanboy’s noise about how “Twitter is search” to get Microsoft to consider pay a crazy amount for it (as it did for PoweRset), which might prompt Google to outbid Microsoft, as it did for Doubleclick.
Ultimately though, Twitter is not search, at least not yet, and its long term utility has yet to be determined. In no way is this a knock. It’s an observation. It’s also reality. Twitter is evolving, and the market meltdown could prove to be a blessing in disguise… were it not for one thing (which we’ll delicately/respectfully get to in a second).
Twitter might be search, it might be news, it might be classifieds, which is what I think Google actually was… but the point it, 1% of 1% of people would turn to Twitter for search in its current incarnation. If MSFT’s own Don Dodge argues that 1% market share of search was (pre-crash) $1B, then 1% of that is $10M. Not too shabby, but Twitter’s raised over $30M on a $250M valuation. So if I were Twitter (in its current incarnation), I wouldn’t push the “search” tagline too much… maybe Twitter is a part of the future of news. But let’s face it, news organizations are so shackled now (due to their print pedigree) that they won’t know what to do with it either, and even if they did, they could not.
Ultimately, Twitter only has 6M users, which is nothing to sneeze at, but having won over a vocal minority isn’t enough to talk down to players like Google… and just as it was ridiculous to say last year that “Facebook would kybosh Google“, it’s more ridiculous to say that about Twitter.
Which leads us to make the following recommendation to some of the company’s financial backers: get the hell out of the spotlight and let the company operate and execute instead of looking for a soapbox to inflate expectations out of any realm of possibility.
The best summation of all of this is a commentor on the SAI blog:
A guy with a multi-million dollar vested interest in Twitter tells you that he swears they have a secret business model, and you idiots print it as news. That’s great guys.
After all, the most successful companies of the last decade (starting with Google) all underpromised and overdelivered. In other words, for a company that likes to limit expression to 140 words, some of its backers are doing way too much yacking for the firm’s own good… Come to think of it, the same can be said for most of the company’s supporters, too.
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