This week, San Francisco is playing host to the annual Web 2.0 Summit, where tech giants and kings of social media discuss the future of online business and community. And on Tuesday, Twitter CEO and "The Man of 140 Characters" Evan Williams briefly touched upon the revenue streams that might be in store for his company -- but in typical fashion, he skirted a straight answer like a well-rehearsed politician.
That's not to fault the summit's co-host John Battelle, who interviewed Williams onstage. Battelle did try his best to get Williams to repeat himself and divulge the slightest bit of information on where Twitter is headed financially. First question: "Everybody wants to know what your revenue model is going to be. So, what is your revenue model going to be?"
What he and the crowd were given was more talk of Twitter features and reiteration of what everyone's already heard.
"We're thinking about it, you can't raise as much money as we have without thinking about it. We're spending 97% of our efforts still in improving the product and technology. It would be a mistake to take our eye off the product and focus on the revenue right now."
Williams related that the company is open to new advertising ideas (eventually) and is considering the possibility of charging brands for using the service (hypothetically). He did refer to Twitter's traffic plateau and hopes that new Twitter features -- like Follow List sharing -- would increase click-throughs.
But when it came time to address a partnership or acquisition by the likes of Facebook or Google
(GOOG) -- which bought out his former enterprise, Blogger -- Williams had this to say: "I didn't see a reason to sell. 'Business is a context for doing interesting things.' The number of cool things we can do with Twitter blows my mind. Going to a bigger company doesn't make that better."
Williams was applauded for his devout dedication to his product, but it begs the question: Why is Evan Williams unwilling to open Twitter up to a revenue model or partnership?
On the surface, the behavior is reminiscent of the writer or artist unwilling to compromise his work to watered-down unsophisticates. It appears that Williams is dead-set on preventing the look and feel of Twitter to be tainted by a third party. As it stands, the site is simple and pure. Except for a background picture, there isn't nearly as much alteration one can do with a Twitter account as they can with their Facebook account -- and MySpace is a Jackson Pollock painting compared to both sites.
Perhaps Williams wants to preserve that simplicity.
On the other hand, from a business standpoint, it's unwise for Williams to hesitate any longer on delivering a revenue model. Roughly 60 million accounts have been registered through the site, but last checked, 60% of users quit after a month
-- not a good sign for a company looking to build a loyal base.
Twitter's recent $1 billion valuation
after a round of financing from investors like Insight Venture Partners and T. Rowe Price
(TROW) admittedly won't last long. In fact, even at what many regard the height of its popularity, some critics claim
that the site isn't worth anything close to $1 billion.
To wait on "improving the product and technology" would risk overall value in the long run.
No positions in stocks mentioned.