This post was originally entitled "Can Twitter Ever Make Money?" But as we wrote it, we realized the issue is bigger than simply wondering how, when and if companies like Twitter will monetize.
The early days of innovation are truly fantastic for early adopters and consumers who are ahead of the market. VC's and Private Equity firms pour billions of dollars into cool ideas. Those who are "in the know" early are/were able to get M&M's brought to them on a Friday night (Kozmo.com), groceries delivered free wherever they lived (Webvan), 100 pounds of pet food without a shipping charge (Pets.com), free music to their PC (Napster), free phone calls across the world (Skype) and more.
The problem is, like your economics teacher told you, there is no free lunch. Someone is paying the bill. And eventually, that person paying the bill, the person paying the salaries of all the people doing things for you, well, he wants to get reimbursed for his efforts.
So look today at what we are getting for free. We can stay in touch with every one of our business contacts no matter how many times they switch jobs, thanks to LinkedIn. And we know the personal lives of all of our friends, thanks to Facebook. And if we want, we can get global updates in real time, 140 characters at a time, thanks to Twitter. All of this for free.
Now the business models that the investors saw said something like this. "We are going to be hugely popular. Everyone will love us. We'll run some ads. And if we get 1% of the people to click on an ad, we'll make a gajillion dollars." It's the model that has worked since Mr. Marconi showed off his first radio nearly 100 years ago.
But 1% of the people aren't clicking on Facebook ads, or upgrading to premium LinkedIn accounts. And Twitter hasn't even come up with any ways to make money. Throw in the fact that the economy is struggling, and that even rich people don't like losing money. Someone has to start generating profits some day.
Well, that's the story FastCompany is addressing in this article. Their synopsis - everything cool you get today for free will basically become a lead generation tool for Google, Microsoft, Amazon, eBay, Apple, etc.... For the Social Media Marketer, that means that these are the days to leverage the creativity and free form activity this medium allows. We all remember how Flickr got destroyed when Yahoo turned it into a way to generate YahooMail accounts. Take these great opportunities available to you today, and grab them before they are simply ways to get you to buy other products. Of course, it wouldn't hurt if we all would just click on a few ads ;)
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