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Twitter - I'm followed, therefore I am

CEO Jack Dorsey, who says Twitter captures the 'status of everything,' talks about monetization

Entrepreneur interview by Bambi Francisco Roizen
October 20, 2008 | Comments (3)
Short URL: http://vator.tv/n/326

(Note: Twitter CEO Jack Dorsey stepped down in October. Many have said that Twitter needs to find a business model, hence the need for Jack to make room. I just spoke with John Borthwick, who is an investor in Twitter, through Twitter's acquisition of Summize. John thought it would be worth re-publishing and sharing this interview since in it, Jack elaborates on possible business model strategies. I thought it would be worth republishing as well. This interview first ran on July 20. Enjoy)

In 2004, I wrote: “I’m searched, therefore I am. To borrow from Rene Descartes' philosophy, in today's Internet-obsessed world, we know we exist, not because we think, but because we're searched.” Today, thanks to Twitter, it's more like "I'm followed, therefore I am." Indeed, even Twitter CEO and co-founder Jack Dorsey says Twitter essentially captures the "status of everything." Wait, I thought Google was God?  Anyway, Jack came to the Vator studio for a three-part interview to talk about Twitter’s business model, the Summize acquisition, the introduction of video updates, and how he views Seesmic, which calls itself a video Twitter, FriendFeed and Twitter clones, such as Pownce, Plurk and Identi.ca. And, that's all in this interview.

I started by asking why Twitter bought Summize for $15 million in mostly stock, rather than licensed the technology. "We’ve always seen filtering and real-time search as a key component to the product,” he said to me. "We see Twitter as a real-time repository of state, in addition to a communication tool."

Indeed, if you spend enough time Twittering, you'll probably begin to see how this "real-time repository of state" makes Google searches look really stale. Just do a quick "Twitter search" about a topic, and you'll see that the information that comes up changes with every update, which is quite often. That same topic will get the same top two dozen links on Google. 

Twitter's ability to deliver the "real-time state" of everyone and everything - including a plant (inside Jack joke) - raises its value significantly, in my opinion. If Twitter were public, I would have raised its rating after the Summize deal. 

So, what are Twitter's business models?

Obviously, there is a potential business model around paid search, one form of monetization that Jack and I discussed in this interview. In this interview, Jack talks about when this may be introduced. But we also talk about a number of models, including charging Whole Foods, JetBlue and others to use Twitter to capture market research about their customers. In the case of CNN and other news outlets using Twitter, it's very conceivable that Twitter will make money much like news wires make money - meaning licensing the data.  

Jack also talks about how Twitter makes money today - through SMS - and that even though his team thought the mobile phone would be the predominant platform through which updates are made, it's not. Finally, Jack talks about whether Twitter will allow for video updates, much like Seesmic, and how he sees the competitive landscape. 

(Note: Jack joins me for two other interviews. One is on how Twitter is changing the way we socialize (and stalk, err, I mean observe). The other interview is on lessons Jack has learned as an entrepreneur. Watch for those in the next week.)



Related companies, investors and entrepreneurs

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FriendFeed
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Description: FriendFeed makes it fun and easy to share and discuss web pages, photos, and videos with your friends and family.
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Twitter
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Description: What is Twitter? Twitter is an online information network that allows anyone with an account to post 140 character messages, called twee...
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Seesmic
Startup/Business
Description: People share their opinion on any topic in video. There is a social software layer, much like Twitter, to follow the conversation. Loic c...

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Comments

David Saad
David Saad, on July 21, 2008

Few years back, the story was "let's build it, and they'll come, and then we'll tweek it to monetize it". Then came the bust which rolled back the story to cash flow and profits. With the few exceptions such as Myspace, YouTube, and now Twitter, are we back to eyeballs for the masses?


Comment_gbg
Bradly Couch, on July 26, 2008

DATA ~ it is what drives EVERY model. Who's seeing your logo and how many times can you show it is paying off? Good work Twitter!

Thanx Bam


Jeremy Campbell
Jeremy Campbell, on October 22, 2008

It's nice to see those overlay ads in your video player now, good job Bambi and the VatorTv team.

It looks like Twitter is headed in the direction where they are looking to build the site up and sell for $100+ million and then let the buyer worry about sizable monetization. I respect them for caring so much about the community and really trying to build a lasting web property, but if I was in control I would look for a good community/cash balance. But I suppose a new utility = a new form of business model needed but why not experiment a little in this new media landscape?!

It's true what Jack says about having all kinds of ways to monetize but hesitating for fear of alienating the community, and the possibility of having top users flee for competing offers that don't have disruptive ads and/or subscription fees.

I like what Twitter is all about, I think it's great that the developers have stretched the Twitter API as far as any offered on the Internet ever, and yet I still can't believe that something so simple has evolved and is now becoming such an important part of our mainstream culture.

We will continue to see many variations of Twitter, but Twitter will always remembered for paving the way towards a new way of connecting with and discovering new people.

I look forward to seeing how Twitter moves forward as they have many avenues that they can explore. And which path they take will be interesting, but you can be sure they will highly value their community's voice on that issue when the time comes.


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