Twitter Groups Business Model

I have been doing a ton of microblogging on Twitter lately, and I am disappointed that there still are no groups for Twitter. After seeing the effect Twitter had with their election page, and recently seeing Tweetmas you would think they would eventually roll out groups for everyone.

They seem like such a simple addition, but I think it has been delayed because Twitter has plan to monetize their service using groups. I mentioned before how I felt their acquisition of Summize was a path to turning a profit, and I can see them combining that service with groups for advertising purposes or charging for enterprise type groups as some of their clones have done.

Twitter’s most significant asset is how it captures word of mouth, which greatly enhances their ability to effectively serve ads. Additionally, studies have shown that the affinity of members within a social network is inversely proportional to CPM rates. Interest groups like the election hub constructed by Twitter will have relatively high CPM rates and a high value since their members would have a fairly low affinity. Of course, they would be totally worthless without driving users to the content, so a group/interest search and recommendation engine would also have to be implemented as well. There still could be traditional self-organizing groups, friends tweeting to friends and co-workers tweeting to co-workers, but unless Twitter is charging for that category of groups there is not much value in it.


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