Transforming Twitter into

Short Text Marketplace

A Revenue Model based on the True Promises of Web 2.0

Executive Summary

  Promises of Web 2.0 – a Checklist

  Assertions on Twitter Business
  What is Twitter’s Product
  Value Dimensions of Twitter’s Product
  A Preliminary Customer Segmentation and
Pricing Scheme, with One Case Example
  Revenue Forecast
  Q&A

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 Checklist highlights multiple yet
under-exploited opportunities
Web 2.0 Promises Twitter Offers Peer Revenue Model

Connecting People through Facebook,

advertisement
different platform MySpace

User Generated Content blogs advertisement

Stickiness LinkedIn Advertisement?

Technology displacing
existing markets/create new Google Advertisement, subscription
markets

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 Assertions on Twitter Business
  Twitter does not represent any breakthrough in technology,
hence, thinking “product = technology” will go no where
  Twitter product holds almost all promises of Web 2.0, thus
in a better position to exploit the revenue potential
  The current Twitter fans are mostly early adopter and
should not be be counted exclusively as cash cow for
Twitter (think AOL subscribers)
  With good product positioning, Twitter will be able to
displace existing market and create new ones, like Google
did

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 (Re-)Defining Twitter’s Product
What is Twitter’s Product
  140 byte text, user-created, delivered real-time, across all
technology platforms
Now think, what are the short text that currently generate
revenue
  P2P classified – for sale (cars, electronics), services
  Dating
  Commercial classified – flyers, coupons
  Personal SMS
Twitter is not a short-text provider – it is a short-text
marketplace

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 Twitter offers new dimensions in
short-text marketplace
High desirability – Free or
Pay to Pull
breaking news,
Nominal Fee
gossip, exclusivity

Content Desirability
Low desirability –
marketing, Pay to Push Free
promotional,
narcissistic Area 3

Time Sensitive – Timely Delivery Time Insensitive –

Area 4campaign,
real-time “I have a crush on
news Obama…”

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 Customer Segmentation based on
Content Desirability and Time
Sensitivities
Avid high volume receivers for time Free for personal infrequent users
sensitive /exclusive content
•  Value – receive unlimited exclusive
information real-time
•  Product – a revenue sharing deal with content
generators
•  Pricing – medium, comparable to monthly
Twitter
newspaper cost
Platform
Marketers with physical Average receivers with occasional
locations and Campaign Organizers demand for time sensitive
exclusive content
•  Value – push time sensitive msg to target
Value – receive limited exclusive
demographic
information real-time
•  Product – short msg with opted-in users Product – a revenue sharing deal with
•  Pricing – high, fixed or variable content generators
Pricing – low, cost of a cup of coffee

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 Case Example – Real-time Mall
Promotion
Customer: Westfield Mall Studio City LA
Promotional Message (to pre-opted in users):
For the next 30 minutes, anyone who shops at
Body Shop would get a 10% discount
Results: Increased store traffic by 30%, sales by
10%
Cost: (variable pricing) $50 (500 receivers)

Marketers with physical

locations and Campaign Organizers
•  Value – push time sensitive msg to target
demographic
•  Product – short msg with opted-in users
•  Pricing – high, fixed or variable

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 Revenue Potential – FY Run Rate, US Only

Rev Per Client (ex

Client Type Pricing Revenue
rev sharing)

High Fixed or
Paid Information Pushers $1000 - $5000 $2,500 x 10, 000 = $25M
Variable

Frequently Info Pullers Medium Monthly $10,99 (-$5.99) $5 x 2,000, 000 = $10M

Occasional Info Pullers Nominal Monthly $3.99 (-$1.99) $2 x 4,000, 000 = $8M

Web Advertising/ Other Industry Average NA $5M

Grand Total = $48M

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Five Q&As
Q: How do you kick start your plan?
A: By publishing a ranking to establish criteria for “desirability” of
the content immediately
Q: How do you differentiate the time sensitivity?
A: By implementing message delays incrementally for all unpaid
users till they notice it
Q: Where would you recruit the sales people?
A: From the newspaper sales team
Q: Will Facebook copy your model?
A: Yes, they might, but 140 byte would then become our core
advantage since it is lower cost
Q: How big will Twitter become?
A: The key is to provide a platform of self-generating marketplace,
think Craiglist 2.0, what is CL’s valuation?

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