Twitter CEO Jack Dorsey and co-founder Biz Stone have demonstrated an exceptional level of executive transparency by frequently utilizing their own Twitter micro-blogging service to share personal details. Additionally, they have gone as far as publishing their phone numbers and business address on Twitter’s Contact page. This made it convenient for me to reach out to them and arrange a visit to their San Francisco office. However, there are a couple of aspects that they choose not to be transparent about: the number of Twitter users and their revenue generation strategy, which involves paying for almost every SMS message sent and received through the service.
Twitter allows users to send 140-character micro-blog posts to followers who have subscribed to their Twitter feeds. These feeds can be accessed through various platforms such as text messaging, the web, instant messaging, or email. The service is free, with costs varying based on how text messages are paid for through the user’s cell phone carrier. Users also have the option to solely read messages on the web, potentially reducing their cell phone expenses. Twitter originated as a spin-off from Obvious Corp., established by Evan Williams, who previously co-founded Pyra Labs, the creators of Blogger software that was later acquired by Google.
Upon my initial use of Twitter, I pondered on how the platform would generate revenue. Would they incorporate ads tailored to feed content? Could they potentially collaborate with a cell phone carrier to offer the service as a monthly add-on subscription?
Advertising presents a viable option for Twitter. Personally, I utilize the platform to share updates on the music I’m currently listening to, the TV shows I enjoy, my newborn baby, and more. There is definite potential for targeted advertising similar to Google Ads, with the necessary privacy considerations.
Certain SMS alert features may be worth paying for. From my perspective, users would prefer a fixed monthly fee rather than a system that could unexpectedly result in high costs due to a surge in alerts. I could envision a scenario where I pay $6 monthly for unlimited Twitter SMS alerts — a service that Twitter could potentially collaborate with mobile carriers to provide to their customers.
In the end, it is conceivable that the most sensible business strategy for Twitter would involve establishing a substantial user base and then being acquired by a social network or another online platform (such as Google, Yahoo, Microsoft, etc.) that could integrate Twitter into its existing services.
How did Twitter first start?
Biz Stone explained that Twitter originated as a side project of Odeo, a podcasting service. The idea for Twitter was conceived by Jack Dorsey, who grew up in St. Louis and developed a fascination with dispatch routing at the age of 14. Despite the absence of bike messengers in St. Louis, Dorsey was determined to pursue this interest and began writing open source software for dispatching. This software is still utilized by numerous taxi cab companies today.
Dorsey’s fascination with routing, coupled with his observation of status messages in instant messaging, sparked the idea of creating a status service. He approached us with the concept of easily sharing one’s status with friends, without the need for lengthy blog or LiveJournal entries. At that time, we were exploring the possibilities of SMS and its potential applications. Consequently, in March 2006, we established the connection between status updates and SMS, leading to the birth of Twitter.
Why don’t you talk about the number of users you have or the messages sent?
Stone: We have made the decision not to disclose specific figures regarding the number of users, messages generated, messages distributed, or any other data that would reveal the scale of our service. There are a few reasons behind this choice. Firstly, we believe that the vitality of a product and its community is best gauged by the level of activity both on our platform and beyond. Unofficial forums that have been created solely for discussing Twitter, for instance, serve as a more accurate measure of our success than a mere tally of user entries in our database.
Moreover, while this information may be of interest to analysts, journalists, and our competitors in the business realm, Twitter Inc. sees little strategic incentive in disclosing our total user count. We also do not believe that it holds any value for our users. As of now, our policy is to keep the number of individuals with registered Twitter accounts confidential. (Additionally, it adds an element of excitement to have a secret number – I highly recommend it.)
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