I read an interesting article from Mark Evans pondering what Twitter is actually worth.  Considering that Twitter has yet failed to make any money, it's an intriguing question and I'll be eager to see the outcome.  Some have pondered that the company could be worth a billion + based upon its network of over 125 million registered users.  That is a huge potential market and as the popularity of Twitter continues to spread that number continues to grow incrementally.

But a history of no business model provokes other more critical hypotheses that Twitter may actually be worth less than the billion + dollars that many are speculating.

I do see Twitter as a vast social network with incredible potential--an amazing platform for learning and spreading info, making contacts and developing relationships.  But I also have to concur that I'll be curious to see how the Twitter phenomenon plays out.  Of that 125 million users, I wonder how many of them are actually active users?  I have a strong feeling that the number could be 50%+ less than 125 million.  Potentially more in the range of 30 million or even less.  So many users have registered for Twitter, curious to see what all of the hype is about.  But I've heard from such a large number of people that they "just don't have the time" to stay active.  That Twitter requires too much of a time commitment in order to garner real success.

Although our company has utilized Twitter sporadically with some success, I do know people who are very active on Twitter and swear by it as an incredible viral  network.  And I can't disagree with that assessment.

But in order to be a truly successful business, the bottom line is...Twitter needs to make some money.  The most obvious source for that income is advertising.  The recent launch of the New Twitter seems aimed at making Twitter more advertiser friendly rather than improving the user experience so indicates that that may be the path that Twitter plans to take to help them monetize.

But will advertising on Twitter actually be successful?  Many red flags come to mind.  There is the potential that Twitter users may not be as open to advertising as Facebook users.  Also, since Twitter requires very little information from a user when they register, its only opportunity to provide truly targeted advertising to businesses would be through content analysis, similar to the Yahoo! behavioral targeting.  But since Twitter doesn't capture as much demographic info for its users besides where you are from geographically I don't see the opportunity to target as successfully as Facebook, who can drill down beyond where you live to when you graduated, the schools you attended, what you like, what you don't like, your current career, etc., etc.

Another big red flag to me is that, since most Twitter users don't actually utilize the Twitter.com interface as their day-to-day tool for Twitter use, how will Twitter handle the multitude of interfaces such as Tweetie, Tweet Deck, Twhirl, etc. in order to push advertising to their users?  I have to admit that I'm a little skeptical and see some major obstacles in the path of Twitter's becoming a legitimate business.  But who knows?  They may have some ideas up their sleeves that aren't apparent just yet.

I guess that time will tell!  What do you think?

--Tracy Marlowe