The all-time favourite topic of "where will Twitter make any money from?" is back on the table now with the recession (officially approved, that too!) and Ev commenting that their target to make money off the service has now been pre-poned to 2009, than 2010. My own previous thoughts on the matter are here, so this is the updated version:

1) Text Messages: This is the most obvious option, but it is the least mentioned too. And I would really be surprised if Twitter is not making some money off this already. They do have dedicated short codes working in various geographies and in a lot of them even incoming messages are billed to the customer.

At least as early as April this year, Twitter was reportedly doing over 3 million messages a day. I am assuming that this number is again the total number of messages created than total number of messages sent across the system, which will a considerably higher number. A percentage (possibly, small) of this number is represented by users on SMS and each one of those messages represent a possible revenue opportunity.

My gut feeling is that Twitter already has enough volume of updates flowing in via 'txt' that is enough for them to swing minimum-guarantee deals with the service providers.

2) Firehose & Data Mining: There is great value in Twitter from the users' point of view as something close to an utility that crosses almost every known boundary. But there is also a greater value in the service for companies in measuring the pulse of the internet in near-real time. Any other known form of measurement of user data currently has a lag in it, effecting add-on latencies in reactions and responses.

While that value is out there, it is also very raw and untapped. It can drive you nuts to just keep reading the Twitter public stream, the firehose (the full stream of the updates served via XMPP) is apparently much worse than the public stream. Twitter could sell access to the fire hose to firms for a set fee, but would reduce the possible value per client to Twitter.

What they should do is to create reporting interfaces atop the fire hose to do detailed tending and data mining for companies and sell that, than access to the fire hose itself. It is a known thing that Twitter has been working to open up the Fire hose to more developers, so this may indeed turn out to be one of the options in the long run.

3) Premium Access Methods: After being back up for a while, one of the earlier methods to access Twitter - via IM - has been off for a long time. By now, most of the regular Twitter users are used to interacting with the service via the website or the numerous clients that are out there. Both have problems with API limits and latency, which was not the case with IM. Now could be the time to bring it back as a premium service that guarantees minimal latency.

The previous post had mentioned other ways in which they can enable premium access methods, won't repeat them here again.

business models