How Twitter Will Make Money

The topic of how Twitter might make money is so popular these days that people are writing Onion-like parodies of news stories announcing Twitter’s plans. That particular story was a really popular link on Twitter today.

But the question remains: how will Twitter make money? I think I know at least one of the ways they’ll do it, and I’m surprised that more people aren’t talking about this.

I discovered a service called I Want Sandy a year or two ago and became a user almost immediately. The gist of the idea: Sandy is your virtual assistant, reminding you of tasks and appointments as you like. The interesting part wasn’t just that Sandy kept your calendars and to-do lists organized, but that she did it all through a human-readable text-based interface. I could send Sandy an email saying something to the effect of, “Remind me to buy milk tomorrow at 5pm” right in the subject line of the email. (I believe she also had an IM interface, and of course a web interface.) And sure enough, tomorrow at 5pm I would get an SMS message (if that was my preferred method of communication) that reminded me to buy milk. Simple. Human. Useful! I found myself being confident to take on tasks and make promises knowing that I wouldn’t forget things. Sure, I’ll ping you next Tuesday about that. (Send message to Sandy.) Oh, your birthday is when? (Send message to Sandy.) You get the idea.

When Twitter came around, the folks at I Want Sandy were smart enough to register the ultra-short @s Twitter name and allow people to send messages to Sandy through that interface. I was already on Twitter and it was a convenient way to augment the service. I could be reminded of events and to-dos through Twitter direct messages too, instead of just SMS and email.

Fast-forward to November 2008. The company who runs I Want Sandy, Values of n, announced that they were purchased by Twitter. And the CEO, Rael Dornfest, became a Twitter User Experience engineer. Aha! I Want Sandy went offline in December 2008 and is no longer functional.

It seems nearly a sure thing to me that if Twitter has acquired all the intellectual property behind I Want Sandy that they’ll be integrating it with the service. It seemed to work so well that I’m not sure how they’d improve it besides tightening and deepening the service’s integration with twitter.com, but we’ll see. I’d love it if they offered it for free to make Twitter more palatable and useful to more people, but I could easily see paying $1 / month to get reminders from Twitter over SMS (or whatever) because I personally know how useful they were to me, and I know the gaping hole their absence has left. Twitter has stated that they won’t be reducing the value of their service by charging for Twitter features that are currently free. This would certainly be something over and above what is built into Twitter, and offering it as a premium, for-pay service wouldn’t reduce the value of Twitter in anyone’s mind.

So that’s my guess on at least one way they’ll make money. We’ll see if I’m right!