There’s always been jabs at Twitter for not having a viable business model and the chatter has increased in the current economic climate. In a recent interview Evan Williams, Twitter CEO, said “We had planned to focus on revenue in 2010 but that’s no longer the case, so we changed the plan quite a bit… We’ve moved revenue higher on our list of priorities…”.
I believe Twitter, potentially, has an incredible business model.
In The New York Times R&D Labs, where I work, we’ve been talking a lot about ‘smart content’, both in relation to advertising, search and news delivery. For the past 157 years (that’s how old the newspaper is) we’ve essentially delivered ‘dumb content’ to people’s doorsteps. You and I, irrespective of interests, location etc. have received the same newspaper on our doorsteps every morning. We’re beginning to explore ways to make content smarter, to understand what you’ve read, which device you’ve read it on and your micro level interests—making the most important news find you, instead of you having to find it.
This also changes the advertising model where ads become even smarter. Sure, ads are at about a 1st grade reading level now; with adsense and cookies, the ad networks have half an idea of what I’m interested in, but they aren’t exactly smart about it. Just because a friend sends me an email about a baseball game doesn’t mean I want to see ESPN ads in my Gmail.
So what does this have to do with a Twitter business model? Twitter, potentially, has the ability to deliver unbelievably smart advertising; advertising that I actually want to see, and they have the ability to deliver search results far superior and more accurate to Google, putting Twitter in the running to beat Google in the latent quest to the semantic web. With some really intelligent data mining and cross pollination, they could give me ads that makes sense not for something I looked at 3 weeks ago, or a link my wife clicked on when she borrowed my laptop, but ads that are extremely relevant to ‘what I’m doing right now’.
A quick perusal of my Tweets shows that I live in Brooklyn, NY, I work for The New York Times, teach at NYU/ITP, I travel somewhere once a month for work, I love gardening, cappuccinos, my Vespa , U.I./Design and hardware hacking, I’m a political news junkie, I read Gizmodo & NYTimes.com and I was looking for a new car for a while, but now have a MINI and I’m also friends with these people. That’s a treasure trove of data about me, and it’s semantic on a granular level about only my interests.
If I send a tweet saying “I’m looking for a new car does anyone have any recommendations”, I would be more than happy to see ‘smart’ user generated advertising recommendations based on my past tweets, mine the data of other people living Brooklyn who have tweeted about their car and deliver a tweet/ad based on those result leaving spammers lost in the noise. I’d also expect when I send a tweet saying ‘I got a new car and love it!’ that those car ads stop appearing and something else, relevant to only me, takes its place.
And it doesn’t have to be advertising delivered on their site alone. One of the great successes of Twitter has been their APIs and the wonderful applications and sites that users have built with them. Why not build out an advertising or search API that delivers the latest micro level tags or ad links of users interests? There’s a plethora of opportunities with this data, and if it’s done right it becomes enticing and engaging, not annoying, irrelevant and outdated.