Last week, Twitter talked more about its monetization plans for tweets. Robert Scoble wrote about how this implementation might work here:
While I think that this is an interesting opportunity, I have a number of questions. The first is will Twitter have to cut in 3rd party application clients such as Seesmic, Tweetdeck, HootSuite and Twitterific on which most users actually view the Twitter stream? According to some estimates, these types of applications may account for as much 75% of all Twitter activity so the inventory that Twitter can generate from its own site is comparably small. As a result, it will likely rely heavily on the 3rd party apps for the ad inventory.
With Twitter making more noise about charging partners for API access, this could turn into an interesting game of cat and mouse. Maybe the deal ends up being that Twitter doesn’t charge 3rd party apps for API access and, in return, gets to keep 100% of the ad revenue that these applications generate from Twitter’s ads. That said, advertising is a model that that these app developers are pursuing themselves, so if Twitter keeps all of this revenue, it could significantly impair the viability of its own ecosystem and slow adoption. My guess is that if Twitter has success with this marketplace, it will ultimately provide a rev share to the likes of Tweetdeck and Seesmic. If it plays out this way, I think that these companies may finally find a key revenue stream and thus become very compelling investment opportunities, assuming they can get the necessary scale.
In many ways, this type of relationship would be similar to that between Google and AOL in the case where the latter puts a different skin on Google’s search product and benefits handsomely from the AdWords marketplace from users that search on AOL.com.
