Twitter Says No To Ads For Now

Twitter co-founder Biz Stone and his partners are some cool cats. Facebook tried to buy the company for half a billion and they turned it down. The fledgling social networking service also staved off Google from gobbling it up.

The company has a rapidly expanding staff, expected to double its 40-strong by the end of the year and isn’t profitable, Reuters reports.

Yet Stone is looking for revenue streams other than ads, which he figures would do more harm than good to Twitter.

Twitter co-founder Biz Stone said on Monday that the company is developing various add-on tools and services for the businesses and professional users of Twitter, which could create a revenue stream for the company. He said Twitter plans to introduce some of these tools by year end.

But Stone dismissed the notion of selling advertisements on the popular service at this time, even though ad revenue is the main way most Web start-ups manage to stay in business while keeping their service free for consumers.

“There are a few reasons why we’re not pursuing advertising — one is it’s just not quite as interesting to us,” Stone told the Reuters Global Technology Summit in New York via videolink from San Francisco.

Stone said serving up ads alongside Twitter messages could also annoy users. And he said Twitter doesn’t have, and isn’t seeking to hire, the staff to create an advertising-based business.

Stone’s preternaturally cool stance is reminiscent of Braveheart’s in the movie Braveheart. You know, when he and his troops are all lined up, spears in hand, waiting for the cavalry to trample them. “Hold!” Braveheart shouts as they get closer. “Hoooooold!” he screams even louder as they draw even nearer. “HOOOOOOLD!” Braveheart screams with every bit of braveness of his heart as the enemy nears to within a half inch of his army before finally giving them the go-ahead to whip some British ass. Time will tell if Stone and company have a Braveheart-style plan to make money without selling out.

Failing that, there’s always harpooning the everpresent fail whale for his ample supply of lantern oil.

Twitter sees tools, not ads, for revenue [Reuters]
(Photo:Great Beyond)

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  1. italianscallion33 says:

    They turned down $500 million? I would never turn that down.

  2. Edge101 says:

    I applaud Biz for his stance, but he’ll have to make money somehow. Doing so from “add-on tools and services”, though, will probably not generate enough revenue to justify the $500 million valuations being touted. This feels like the same situation as Skype — a popular service, but difficult to monetize to a great extent.

    Edge101
    [www.twitterbacklash.com]

  3. Papercutninja says:

    Twitter is only effective enough for well-established brands/celebrities etc. Think of it as condensing Myspace into it’s only useful feature. The rest of us are SIMPLY NOT INTERESTING ENOUGH for people to follow us. Also, the fact that the baby boomer generation (ie Oprah viewers, CNN etc) LOVE twitter means it is going to die a slow and painful death.

    • nakedscience says:

      @Papercutninja: I dunno. CNN doesn’t really utilize it the way it should be utilized. Also, I have made some GREAT connections within the LGBT community, far and wide (I’m into LGBT politics/activism/volunteering). It’s been very useful for me.

      • Papercutninja says:

        @nakedscience:
        Absolutely, i agree with you. This is what i’m saying. Being part of an organization or being active in a certain community is the only way that Twitter is useful, whether it be trying to figure out where to hold the next protest rally or what Paris Hilton is doing RIGHT NOW. Kinda 2 ends of the spectrum, but everything in between is just sort of lost.

        @Secret Agent Man: Yup. They totally blew their big payday. The Myspace guys were smart about it. I have a feeling the Twitter apocalypse is bearing down on us.

        @lolan64: You’re one of the power-users. I’ll bet that 99% of the people on Twitter just “lurk” and don’t actively participate. If Twitter (unwisely) switches to a pay service like you’re suggesting it will die immediately. I’ll even bet many of your friends will simply jump ship to Facebook or whatever the next social networking tool will be.

        • lolan64 says:

          @Papercutninja: You are probably right about most people leaving Twitter if everyone had to pay. My thought is that they could do something like what LiveJournal does. Basic services are free, but some kind of special rights could be granted to paying “power users.” You’d be amazed at how many people will pay for things like extra user icons, the ability to post polls for people to participate in, etc.

          Also, I think Twitter is benefitting more from increased usage of smartphones (for example, I mostly tweet from my iPhone app) than Facebook’s chat/messaging services, which do not seem to translate well to mobile devices (I get cut off frequently and can only talk to one person at a time instead of the whole group, and the transcript is not saved as it is in Twitter so no long-term throughout-the-day conversations are possible). I do however check my Facebook feed regularly throughout the day as well. :) It’s just not as good for communications, which is why I think Facebook is not really a good replacement service for those who would jump ship if Twitter started charging (but you’re right in that a new tool could most likely be developed as an alternative, not necessarily Facebook).

    • Notsewfast says:

      @Papercutninja:
      I agree with you… While twitter is, in theory, a great way to keep tabs on friends and disseminate information quickly, for us regular Joe’s, its not all that fun.

      Its the type of service that is a media darling because celebrities and newscasters get to be the center of attention all the time. They develop a following and their comments are read by thousands of people. For normal folks who have minimal followers, it can feel at times like you are talking to an empty room.

      If I were the Twitter guys, I’d take the highest buyout offer I could get right now. If its 500 million, take it and never work again, Twitter isn’t going to be the next Microsoft.

    • lolan64 says:

      @Papercutninja: My friends and I are on Twitter constantly. Great way to stay completely up to date with them as well as to have conversations with everyone at once no matter where we are (both geographically-speaking and also whether we’re at the computer or out just using our phones to communicate). Non-friends generally wouldn’t want to follow us, but our purpose in using Twitter is not to tell the world what we had for breakfast, it’s to tell our *friends* what we had for breakfast. In my group of friends, that kind of inanity is fun and silly and a way to feel close to people who are hundreds of miles away (because seriously, you know you tell people you see every day about the littlest things in your life, but usually not those who you don’t see regularly). At this point, I think Twitter could easily make money off of users like us, as we rely on the service so much that we would happily pay a nominal monthly fee for access.

    • Trai_Dep says:

      @Papercutninja: To be fair, MySpace’s other useful feature is meeting frisky underaged vixens addicted to animated GIFs.
      Hmm, maybe Twitter needs a JailBait mini-app to accommodate this…

  4. ThePrettiestStar says:

    Haven’t we already detirmined that profit, or having a business model of any kind, isn’t necessary anymore? As long as the public demands its existence, it will continue, the laws of economics be damned! Look at Facebook, which is on track to becoming the most successful company ever in existence to successfully elude any sort of profit.

  5. rubyfrog says:

    What a terrible idea. You have a business that has no apparent source of revenue besides venture capital, colossal hosting costs and you’ve been adding employees. How exactly do you intend to stay in business again? These dot-coms still amuse me… 99% of them have absolutely no intrinsic value, no tangible services to render for-profit and yet they get grotesquely over-valued by the market. Twitter has an absolutely unsustainable business model… they should have sold out the second they found someone dumb enough to give them money.

    • downwithmonstercable says:

      @rubyfrog: I 100% agree with you. Absolutely unsustainable is spot on. You’d think these people with MBAs would realize that internet ventures are not invincible just because they’re the hot thing on the net. They’re not making money and have millions in bills they have to pay. I don’t see how surviving through their capital is going to work…

    • socialSTD says:

      @rubyfrog:

      Craigslist has done well with no advertising. They only charge for certain services that cater to businesses.

      We’re seeing more and more businesses (i.e. Comcast, Southwest, Verizon) using twitter to provide better customer service. Offering them more add-ons and services to make it easier to reach more of their clients (and possibly bring in new ones) would seem like a win win situation to me.

    • RandomHookup says:

      @rubyfrog: We’re gonna make it up with volume!

  6. sirwired says:

    I think they made a mistake not cashing in… the .com industry is rife with companies that refused to “sell out”, and it is very common for them to get flushed down the toilet a year or two later.

  7. Trai_Dep says:

    I suppose anything that keeps Republican pols fingering keyboards instead of Washington male interns is a good thing.
    That said, how long will it take for the shark to expire after its jumped? Soon?!

  8. rpm773 says:

    Yeah, good luck to these guys.

    They should have taken the $500 million. If they had felt guilty about selling out, they could cleanse their souls by giving a portion to charity.

  9. Cocoa Vanilla says:

    They should sell businesses (Comcast, I’m thinking about YOU) some service to monitor their brand on Twitter. That could easily net them several thousand and would not annoy users.

  10. Traveshamockery says:

    Um, it’s actually William Wallace, not “Braveheart” that screams “HOOOLD”. Braveheart is the name of the movie.

  11. Daveinva says:

    Agree with the others– this is a dumb idea. In a year’s time, Twitter won’t be as cool anymore, there’ll be something new for folks to play with, and they’ll have lost out on getting as much money when they could.

    Online advertising doesn’t have to equal endless Flash pop-ups, click-through pages, or 15-second video commercials. You can do online advertising in an unobtrusive manner– Google does it, the ads on Gmail are nowhere near distracting (of course, that may mean they’re nowhere near effective, but you know what I mean).

    Dumb, just dumb.

  12. synergy says:

    They’ll probably end up like Wallace at the end of Braveheart – rent to pieces and scattered to the four corners and jabbed on some spike somewhere.

    The good news is I am thankful about having ads blocked thanks to FF.

  13. wickedpixel says:

    I would have taken the half BILLION and run. The service will go the way of friendster and napster well before they could ever make that kind of money.

  14. twophrasebark says:

    That sounds like a scene in Gladiator also.

  15. Hans Heiner Buhr says:

    We are in information age, that is the currency. Information + Attention

    Actually I would like to have, put and see, ads, ads in feeds, but very narrow focused ads, those worth my time and attention .

    Take care
    @artclubcaucasus

  16. Robin Rowe says:

    I’m very glad to hear no ads. The beauty of twitter is its simplicity in real time. I love the platform just as it is.

  17. tcp100 says:

    Well that’s mighty swell that you like it the way it is – but you can’t like it all that much, as they’re basically signing their death warrant. Servers don’t run on air, and many a dot com has learned the hard way that employees prefer to be paid in cash versus kudos. Is anyone seriously debating the stupidity of this move? The only way for Twitter to survive without ads would be for a large company (ie Google) to integrate it with their other offerings. If “Biz” turned down half a billion, he’s an embarrassment to his namesake. Sorry, I know it’s the fad of the minute, but Twitter ain’t worth a quarter of that.

    So, if you like twitter, enjoy it while it lasts. Man, did people learn nothing from the early 2000s?

  18. MissPiss says:

    I dont know about Twitter…am I the only one who feels that people are divulging too much info about their lives to everyone these days? I know people who have accounts with Twitter, Myspace, Facebook, Livejournal, Flickr, and a few other accounts… and stay actively updating it with their personal info! I guess thats just not my thing!

  19. Columbienne says:

    Glad no ads on Twitter, altho I generally just tweet via iPhone and the app I use: Twitter Fon now scrolls an annoying ad banner across the top of the screen. Ick.