paidContent.org - Why Twitter Shouldn't Rule Out Advertising
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Tuesday, May 19, 2009; 6:07 PM
Twitter co-founder Biz Stone announced Monday that his company wouldn't be going after advertising revenues and would instead live on e-commerce proceeds, which many blogs interpreted as Twitter shunning ads forever. Stone may well have just been referring to the company's short-term strategy?we have a call in Twitter to get more clarification. But meantime, here's why it doesn't make sense for Twitter to rule out advertising in the longer run.
?Twitter is in a unique position to practically create a new ad category: With real-time blogging via cell phones, there are plenty of ad possibilities marketers would pay for. Imagine Tweeting about pizza while walking down the street and then seeing an ad for several pizza joints near you. Or Tweeting about a song you've been hearing and then being sent a link to that artist's iTunes page or mobile music store.
?Scaring off users (with too much advertising) is a big risk during the early stages of a company's growth, but as Twitter becomes more mainstream, mature and integrated into its users' everyday lives, the returns from advertising to such a massive audience will likely outweigh the risks of losing users.
?You don't necessarily have to hire lots of people and buy pricey technology to get into the ad business: When the company is ready, it can dip its toes into the waters by partnering with a third-party like Google (NSDQ: GOOG) and then building out its ad-sales force internally once the revenue becomes meaningful.
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