Twitter’s preparing to IPO, and you can expect more ads coming to create a larger revenue stream. Twitter is arguable a key component to our connected lives with real time breaking news, enabling social movements, and helping news spread faster than ever imagined. Twitter is estimated to be worth close to 1 billion dollars, which brings the companies valuation way below Facebook’s $104 billion IPO. With Twitter offering more social value than Facebook, why would the company be worth more? The only way Twitter makes money is through promoted tweets, promoted trends, and promoted profiles. However, one market expert says there is another way for Twitter to bring in more revenue.
In an interview on “Yahoo Finances Breakout” with Joe Fahmy, a managing director at Zor Capital, he said “I think you could do two things. You could not only have the user pay a monthly or annual fee, but you could also have the big news services or big celebrities charge a fee too.” Mr. Fahmy didn’t mention how large of a fee, nor what you incentives you receive beyond getting to follow certain news service or celebrity. Jack Dorsey happens to own Square, a online payment service similar to Paypal. This would enable him to rake in more money on both fronts, while making Sqaure even more reputable. This idea of paying for a social network is not new, in fact App.net is a paid per month/year social that has done very well recently. App.net charges $36/year or $5/month to follow unlimited number of people,have a community that puts you first, and you own all your content you create. Which means App.net won’t sell your pictures, post, files, clicks, or browsing habits to advertisers. The idea sounds a bit ridiculous, but App.net has surpassed a 100,000 paying customers and even began offering limited free accounts. The free accounts are limited to a small storage limit, number of people to follow, and you still have no ads.
While App.net has struggled to find a foothold and keep their network filled with content, Twitter has achieved based on advertising and open to anyone for free. When asking my father, Leon Hitchens III, on whether he would pay a monthly or yearly fee he dismissed the idea, saying he “wouldn’t pay $20 a month for twitter, wouldn’t pay $5.” Mr. Fahmy had addressed this in the interview saying “the people that would pay are the people that you’d want…So a bunch of teeny-boppers don’t follow Justin Bieber or one of the Khardashians, that doesn’t affect your business model.” However, my father contributes to Twitter even though he’s fairly new to the Twitter world. He follow’s news organizations, and Justin Bieber or one of the Khardashians. He uses it as a way to connect with family, friends, and to stay up to speed with what’s hip.
If you agree with Mr. Fahmy or disagree you can reach out to him on Twitter, his handle is @JFahmy. We’d love if you tweet him to include us, @DigitalBounds, in the conversation because we’re interested to see what other Twitter users have to say about this matter. Personally, I believe Twitter is a great medium to get access to news, waste my day away, and connect with like-minded people. However, I would not pay a monthly fee for a service like Twitter. That would limit the amount of users, let alone stop information from war-torn or socially repressed countries from leaking out via Twitter.