Twitter doesn’t make any sense on the surface:
“Some startup is paying squillions of dollars so that you can broadcast free SMS messages to your friends worldwide?
And people actually sign up to have their mobiles clogged with annoying and mundane text messages of no-more-than 140 characters?
And some venture capitalist actually paid for this to get off the ground?”
It reeks of a type of here-we-go-again - dot-com-boom - this-time-in-Web-2.0-form hysteria - and sounds (on the surface) like some venture capitalist was so eager to jump onto the Web 2.0 phenomenon that he bought the first thing that came through his door.
Or at least this is what I thought when I first heard about Twitter.
“Where’s the value in this?” I asked myself.
But the more I scratch the surface (of the Twitter riddle, not my head), the more potential value I see in it.
Twitter is Growing at an Exponential Rate
Twitter’s membership base was said to be 100,000 strong as of late March, and was doubling every three weeks, according to Technology Review
And if the Unique ID’s of the RSS feeds are anything to go by, then as of earlier tonight (when I checked it out) there were at least 4,177,800 users!
And thousands more sign up every hour!!
This is a growth rate which new Web 2.0 services dream of - They type of massive growth experienced by MySpace and YouTube.
And already fan sites are popping up – like Twitterverse – a mashup which looks at the most commonly used words on Twitter.
As Steve Rubel points out, with these sorts of vital statistics it’s only a matter of time until Twitter gets snapped up.
Twitter’s Value is in its ability to Communicate
From a user’s perspective, the real value of Twitter is in its ability to help you communicate with people.
In that way, it’s just like a blog.
If you’re running an internet business, you probably already know the value of a blog: The more you communicate with people, the more likely it is that they will think of you and want to buy from you.
Twitter is just the same – although it has its own strengths and weaknesses.
On the downside, you can only send messages of up to 140 characters.
On the upside, people can receive your messages straight to their mobile phone – meaning you can access them in their daily lives in places where blogs, e-mail and other web technologies can’t reach.
And Twitter foots the bill for you!
What’s more, people WANT to hear about the mundane stuff that happens in your life.
Check out the Twitter account of 2008 U.S. Presidential hopeful, John Edwards - he already has over 2,000 people signed up to find out what he’s doing on a particular day.
Check it out:
(from staff): 1st quarter fundraising deadline is tomorrow…Sen. Edwards will be in KY, IN, OH, and FL today for the final push.
Riveting! 
So what’s in it for Twitter? How does Twitter benefit from all of this?
Twitter’s Value is also in Its Huge Database
But from a business perspective (ie - from Twitter’s point of view) the real value in Twitter is in the size of its database.
SMS marketing companies pay millions to build their databases.
Twitter already has a database of millions of users.
If I had this sort of database, I know what I’d do.
- I’d start collecting demographic data from people (as they signed up, or next time they accessed their account). Age, gender, location – and perhaps some interests;
- I’d then start profiling the database, looking for what people are interested in / what they do. For example, a quick scan of the Twitterverse shows coffee is used often;
- Then, I’d look for companies who wanted to market to these people, by targeting their demographics or certain keywords.
Imagine it - Starbucks sends a broadcast out via Twitter to all users who had ever mentioned the word “coffee”, who lived in an area close to a Starbucks coffee house advertising their latest frappe – and offering people a free upsize if they show this SMS when they order!
Something like:
Try Starbucks new Lychee Frappe: Get yours upsized for free if you show this message when ordering. Today Only At Starbucks.
And you still have characters to spare! 
This is all well and good - but it doesn’t answer the question:
How Can You Profit From Twitter?
Ever since Ed Dale posed the question on his blog, making money out of Twitter is something I’ve spent a lot of time thinking about and researching.
I plan on talking about more in a few days time (so if you’re not subscribed to my RSS feed, then I recommend you hook yourself up right away).
Here’s just one idea – Woot (the site that sells one thing every day) is using Twitter to let people know about their daily specials – and already they have 2054 people signed up!
(Sorry John Edwards - more people are interested in hearing about cheap LCD TV’s than your 2008 Presidential Campaign. ;))
So how do you plan on cashing in from Twitter? What are your ideas and strategies?
Let’s get the conversation started - (and if I use your ideas in my next blog post on Twitter, I’ll be sure to reference you or your blog).
Brent
P.S. - If you’d like to add me to your Twitter account, or find out more about what Twitter does, you can visit my Twitter account.
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20 responses so far ↓
1 Twitter « fortyplustwo // Apr 12, 2007 at 5:23 am
[...] Brent Hodgson sees Twitter from a business and marketing perspective in his post titled How Do You Profit From Twitter - Does Twitter Make Sense?. [...]
2 StumbleUpon » Your page is now on StumbleUpon! // Apr 13, 2007 at 7:39 am
[...] Your page is on StumbleUpon [...]
3 twitter - How To Be Successful Online Community @ BUMPzee! // Apr 26, 2007 at 3:12 am
[...] How Do You Profit From Twitter - Does Twitter Make Sense? brenthodgson - member blog: Brent Hodgson, Copywriter created 16 hours, 12 minutes ago tags: twitter [edit] Comments: BZ: add comment ↓dump [...]
4 Debra Hamel // May 5, 2007 at 3:16 am
I just befriended you on Twitter on my TwitterLit account by way of answering your question above: I just launched TwitterLit.com, from which I hope to make money via Amazon affiliate links. TwitterLit is a fun service that offers literary teasers twice a day: at 12:00 AM and 12:00 PM GMT I post the first line of a book–without author name or book title but with a link to Amazon. These appear on the site, of course, and the posts are available for subscription on Twitter (twitter.com/twitterlit) or by RSS. So far the response has been quite enthusiastic.
5 David Leigh » Blog Archive » Twitter twatter // Jun 17, 2007 at 11:47 pm
[...] read Brent Hodgson’s post trying to make sense of it, but I’m not sure if he’s right. I’m not [...]
6 How is a mobile phone going to effect your niche? // Jul 14, 2007 at 10:16 am
[...] by How Do You Profit From Twitter - Does Twitter Make Sense? « Brent Hodgson, Copywriter — April 11, 2007 [...]
7 Take Ur Vitaminz: How Does Twitter Make Money? // Aug 2, 2007 at 9:25 pm
[...] really make money. NYTimes has an article about Twittering. And so does this guy and this other guy. Obviously, Obvious corp., the founding company of Twitter, run a blog,”Obviously”, that I’ll keep [...]
8 Steve Mills // Oct 25, 2007 at 1:46 pm
I think the value that people, and businesses will get from twitter will be things that need to be enacted on quickly. Accommodation / flight deals, ebay style auctions etc.
Or if you want to impress people with what a diverse and exciting lifestyle you lead
9 Making Money from Twitter // Feb 29, 2008 at 11:38 pm
[...] since I made a post looking at “How Does Twitter Make Money“, I’ve had a steady stream of visitors to my blog from people who were looking for [...]
10 Why Use Twitter? // Mar 13, 2008 at 3:26 pm
[...] might also want to read my posts on How Twitter Makes Money, How to Make Money from Twitter and Over The Shoulder Selling - a popular (indirect) method of [...]
11 Garib // Jul 11, 2008 at 4:55 pm
The question to ask is whether people on twitter are interested in buying stuff online or not. We tend to assume that once we gather a bunch of people together that they will just be buying stuff. Not true. The sale has to be extremely subtle or they don’t buy anything at all.
12 Willie Crawford // Jul 21, 2008 at 10:21 pm
Very thought provoking.
One of the best ebooks that I’ve read on the topic, was written by my friend Dr. Mani, one of the first persons that I heard talking about Twitter. His 40-page ebook is called Twitter Profits,and does a great job of explaining how to make the conversation about your followers, and what they want, and how to sell without selling.
Dr. Mani’s ebook is at: http://TwitterProfit.net
He also points to a lot of other interesting discussion on this topic
13 Ruben.alves.com v.2.1 | Repositrio de Ideias, Conceitos e Sentimentos... // Nov 24, 2008 at 8:26 pm
[...] nascido twitter j mostra o seu potencial para empresas empresas. Existe nomeadamente j alguns posts sobre o assunto. Com as redes sociais, as empresas j no precisam de esperar pelo cliente, podem directamente [...]
14 photoSIG » facebook and twitter // Apr 30, 2009 at 10:50 am
[...] All About TwitterSynch Facebook and Twitter [...]
15 Mary // Jun 24, 2009 at 6:39 am
Good info on Twitter, I was impressed with your knowledge.
Mary
16 Larry Tuttle // Jul 2, 2009 at 3:03 pm
The only people making money on twitterprofithouse are the people running the organization.
17 Mikey Johnson // Aug 15, 2009 at 10:05 am
I have found out about some great products through twitter.At first I thought twitter was just another useless social site. Some of my friends where geting great deals on “walmart” “target” “starbucks” “Sprint” (you name it) products. Thanks guys! http://www.fhtmus.com/mikeyj click on Fhtm rewards Mall…….
18 Firme // Jan 3, 2010 at 6:00 pm
I am totaly agree with you Brent. I’m still waiting the answer of your last question
19 Nick K // Feb 19, 2010 at 9:54 am
From a user perspective there are dimminishing returns to marketing by keyword. Companies tweeting offers to their followers is one thing, but if $tarbux decides to spam me over SMS just because I mentioned coffee in one tweet, I would leave twitter, or at least be very careful about what I mention on my tweets in the future.
Multiple users doing this, as well as other users gaming the trending topics, makes the signal to noise ratio a lot lower than this article seems to recognize.
20 Fans Social // Mar 17, 2011 at 7:37 am
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