For a while now, the three brothers, have discussed Twitter and its succes quite vividly. We all like Twitter and we use it ourselves to publish thoughts and links. So as users we see the obvious benefits of the service. But, and there is always a but, we also see some problems in regards to Twitter as a business.

Twitter vs. Status Updates

Plainly speaking Twitter is a social network stripped of all social features, except for the status updates. This is probably also one of the key ingredients in its succes. So, why is Tweets any different from FaceBook status updates? Well, I have given this alot of thought and the obvious reason that came to mind, was that Twitter is a service for professionals while FaceBook is a community for friends, as they demonstrate time and time again. Being an avid twitter user myself I have noticed that almost every single update I see, is from a professional who uses Twitter to gain awareness, make money or brand themselves. So, a Linkedin comparison would probably be more appropriate than a FaceBook. Instead of friends you have followers. Is Linkedin really about more then profiling yourself and your network? Twitter ads the value of blogmentality, which Linkedin have blatantly overlooked as statusupdates there are as rare as revenue in web 2.0 startups (I’ll get back to that).

So to summarize, twitter equals business output/branding while status updates equals mostly pathosfilled notes targeted at friends.

Service or Platform?

I remember the first time I heard about Twitter, I thought, and in a sense still think, that Twitter is no more than a feature. Om Malik had an interesting take on it, as he contemplated whether or not it would be smart of Twitter to cash out now, or hold out for the really big pay-day. He simply asked if Twitter considers itself a platform or a service. If you ask Evan Williams or Biz Stone, the answer will undoubtedly be that it is, or at least it is turning into a platform. Yet I do not see the justification in calling it a platform. If you do, please write me or make a comment telling me how and why.

The fact that twitter itself admits that most of its traffic and updates come from other sites/apps does not speak well for monetization. I will dig a little deeper into the subject as we march ahead.

Too Open?

Here at Muzui we are firm believers of openness, but I think in the case of Twitter they really haven’t considered the consequences. If, let’s just say, 60% of their users are active off-site, that means 60% that are not ever going to bring in revenue of any significant size. How will Twitter reach that audience? It will not be enough just throwing in an ad or two a day into the twitter stream. So, I state the obvious and conclude that although their open strategy has worked in terms of user increase, they have themselves created future obstacles that will make Twitter feel like Sisifos. No matter how hard they try, their revenue will never surpass their expenses. And if they do, they need to su they rpass it in a way that justifies 250 milion smackerones.

Monetization, really that easy?

As many bloggers, pundits and evidently investors have recently resonated, monetizing Twitter will be a piece of cake as long as they see growth and have loyal users. I beg to differ. I truly believe that Twitter has not yet attempted to monetize, not because they want to gain a much larger following first, but more importantly the fact that once have tried monetizing and failed, 250 million dollar valuations will be about as likely as me shaving my moustache. If it was really that as easy, and they don’t think it will alienate their users, why not use the good old trial and error approach?

My advice to Twitter: DON’T TRY TO MONETIZE! Hype is a hell of a drug.