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Characterizing Twitter’s business model
The business model employed at Twitter Corporation seems to lack a proper definition, a problem that many analysts have debated over the last five years. In fact, analysts have criticized the company for lack of a clear business model since it was launched, despite having one of the largest social sites in the modern world. From the reading, it is clear that the company’s business model has a focus on chance, where the managers express interest and then follow a certain group of people who have registered as members of the social site. In this case, a person who joins the site as a member is included as a new member of a wider family of customers and is given the opportunity to follow certain things or people.
It seems that the world of these customers is interested in certain things or people, and it is a chance to find them on Twitter. People join the group thinking or hoping that there, they will find who or what they want to find. It is all about information availability, which is again determined by chance. the company merely advertises the product and hopes that as many members as possible will join and bring with them a wide range of information, which will then attract other customers to the site. Therefore, although there is no clear business model, apparently, the business model the company employs seems to rely heavily on serendipity.
If Twitter is to have a revenue model, which of the revenue models available would work?
It is obvious that the company cannot attempt to charge an amount of fee on new members who join the social site. This is likely to distract the process of registration and reduce the number of people joining the social community. Secondly, the company cannot charge some fee on sending messages or “tweeting” because this will be almost the same as charging some registration fee. Therefore, the only option that can work best for the company is to determine a model that will help it obtain funds from other areas. A better method is to focus on Web and Mobile Revenue Models. In this case, it is suggested that Twitter focus on Promoted Content as its revenue model.
In this model, the company will be charging some advertising fee on companies, organizations or individuals who seek to advertise or promote their business on the social site. Just before joining the site, such customers will be required to deposit some amount of money determined by the nature of the advertisement they want to place such as the size of data it contains, the number of pages it wants to use on the site, location of the customer and the period it will remain active on the site. The role of the company will be to ensure that there is a large number of active members on the social site in order to convince the advertisers that their products will be promoted once they place an ad on the social site. On the other hand, the advertisers will be seeking to follow a large number of people on the site by inviting them to “like” or “follow” the company’s profile.
What is the most important asset that Twitter has, and how could it monetize this asset
As a social site, the freedom of joining the social community at Twitter is the strong point for the company because as many people or groups will be joining as new members every day. As it stands, Twitter’s large numbers of members who have registered as members of the Twitter community make an important asset to the company. Given that the company finds it difficult to obtain revenue from charging members on registration, it is important to turn this community into an asset with which it can attract online advertisers
What impact will a high customer chum rate have on Twitter’s potential advertising revenue?
A high customer churn rate implies that there is a large number of people seeing an ad placed on the social site. Thus, companies will be assured that their ads will reach as many people as possible on Twitter.. In fact, online advertisement requires a company or individual to ensure that as many people as possible will see the advertisement on their screens. The strategy is to ensure that an ad runs in a website or search engine with a large number of daily visitors. Twitter’s large community is therefore an asset because it will provide the advertisers with an assurance that their website have one of the largest visitors every moment, giving them an opportunity to ensure that as many people as possible see an ad. The advertisers will also be expecting to obtain a large volume of messages as replies and suggestions from the social community on Twitter, which will be an indication that the promotion is progressing as required. In other words, a promoted revenue model will seek to obtain revenues from advertisers who seek to promote their business online. These will include celebrities and companies that seek to enlist a large number of “followers” and “following” as their potential clients.
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