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Summary:

Twitter is considering charging companies for access to its users as a way to make money, and delay having to raise another round of capital…

imageTwitter is considering charging companies for access to its users as a way to make money, and delay having to raise another round of capital in these tough economic times, reports Bloomberg, which talked to Twitter’s CEO Evan Williams. The San Francisco-based company, which has already raised $22 million, has been able to count a number of successes, from playing an important role in the election, to hitting one billion “tweets,” but making money is not one of them. Williams: “I want to manage things so I don’t have to raise money in 2009.”

The options range from charging companies to reach its users, such as sending out coupons or promotions to charging companies that want to use the site to gather feedback on their products, or display ads on its search engine. Recently, the company turned off the ability to conduct people searches on its site, saying that it was being abused “in ways that were detrimental to the overall stability of the service.” That may create an opportunity since the only way to currently identify users is by uploading your email contact list. Twitter also will likely leverage its reach — globally, the number of visitors to Twitter rose almost fivefold to 5.57 million in September from a year earlier, according to ComScore.

If Twitter fails to find a business model, it could cost them. Bloomberg reports that in the past year valuations for start-ups have fallen at least 20 percent, which has forced companies to be more conservative with their cash. Otherwise, they would have to sell a larger percentage of the company to raise more money. When Twitter raised money this summer, it had a “really good” valuation. “Everybody’s worth less. The ecosystem takes a hit as a whole,” said Williams, who sold his previous venture, Blogger, to Google (NSDQ: GOOG) in 2003.

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  3. wonder how they are going to earn money based on a business model that does not support upfront profit.

  4. I agree, that is one of the issues with social sites, they rely on long term strategies and being bought or on their subscriber base for overall revenue.

  5. abota lawyers in illinois Friday, February 6, 2009

    I agree with the previous comment, they rely to much on long term strategies and hopes that their community will be worth something.

  6. Private Equity Tuesday, May 5, 2009

    Still no update on this front despite now being well into 2009.

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