UPDATED 14:02 EDT / JULY 21 2011

NEWS

Commerce: Twitter’s New Monetization Strategy

The future of Twitter is hidden behind the walls of an unforeseen future, or so it seems. The departure of two its co-founders, the impact of Google+, and even the business model itself gets many people to question how exactly the social network is going to monetize beyond advertising. Now, the answer comes straight from Twitter CEO Dick Costolo himself, presenting us ‘commerce’ during a keynote interview at Fortune BrainstormTech in Aspen.

Costolo discussed the company’s business model along with a variety of advertising strategies (e.g. self-serve ads). He pointed out that conference organizers and sports teams had taken advantage of Twitter as an advertising medium to promote their website in order to sell tickets. Take for instance the San Diego Chargers, they were able to sell about a thousand tickets to a game using this approach and it wouldn’t have worked as perfectly elsewhere, not even on local television. Twitter didn’t make money on those dealings but the point is that “There’s a commerce opportunity there for us to take advantage of if we want,” Costolo said. “How can we remove friction from the process?”

Costolo didn’t elaborate the idea, neither did he hint about a plan to work on these monetization openings. He merely indicated that there’s money on that kind of process, and that the process would have been smoother and more efficient had it not forced buyer to purchase the ticket off another website. Although Costolo refused to disclose the company’s financial affairs, he clarified that advertising–such as sponsored tweets, sponsored trending topics and promoted accounts–will continue to be the company’s stronghold for revenue.

When asked to comment on the exit the two top officials, Costolo said they had been misplaced and that the current management has been doing really well. “Jack and I, specifically, work very well together,” Costolo said. “He speaks with the fluency of the inventor of the product.” Since Costolo’s employment to Twitter in 2009, two company co-founders had already departed and he was promoted to CEO after 13 months of being with the company.

Generating revenue seems to have always been a bit complicated for Twitter, even squabbling over the matter with some of its developer. Take for example UberMedia whose apps–UberTwitter, UberCurrent and twidroyd–are banned because of violation of terms and conditions. Twitter goes on explaining that these three apps directly compete with Twitter itself.

And the clash does not end there. Twitter is currently under federal investigation because it became indifferent towards UberTwitter creator Bill Gross who received funding to buy Tweetdeck. After shutting down some of his apps, Twitter acquired Tweetdeck for itself. Oh well, as JS-Kit Echo co-founder Khris Loux puts it, “Twitter has a choice of being a tyrant, or a benevolent king.” It’s not being compassionate at the moment.


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