How will Twitter make money? Who knows?

  • Associated Press
  • Friday, July 10, 2009 9:30pm
  • Business

SUN VALLEY, Idaho — It turns out the media elite aren’t so different from a lot of less affluent people: They think Twitter is a great communications tool, but can’t figure out how the online messaging service is going to make money.

The recurring doubts about Twitter’s moneymaking potential cropped up again last week as an exclusive media summit hosted by investment banker Allen &Go. got under way at the posh Sun Valley resort.

One of the first sessions focused on how to capitalize on digital media. Twitter quickly became a focal point of the discussion because it has emerged as one of the Internet’s fastest-growing services this year.

But Twitter hasn’t attempted to profit from its popularity yet, leaving everyone guessing about how the 3-year-old startup intends to pay its bills after it exhausts its $55 million venture capital.

The participants on the panel moderated by media writer Ken Auletta of The New Yorker magazine predicted Twitter Inc. will face major challenges when the San Francisco-based company finally tries to generate revenue. Reporters were barred from the session — like all other meetings at the media summit — but Auletta confirmed the tenor of the Twitter talk afterward.

Two of the panel participants, veteran media executive Barry Diller and cable television magnate John Malone, reiterated their skepticism about Twitter’s moneymaking potential in separate interviews.

“I think it’s a great service. I just don’t think it’s a natural advertising medium,” said Diller, who is chief executive of online conglomerate InterActiveCorp.

Malone, chairman of Liberty Media Corp., also believes Twitter will be hard-pressed to sell advertising on its messaging service without alienating users. Twitter’s best bet, Malone said, probably is to simply get people so addicted to the service that they might eventually pay fees.

It’s an idea that YouTube, the Internet’s leading video service, might want to try. Malone said billionaire investor Warren Buffett confided that he enjoys watching YouTube so much that he would be willing to pay a $5 monthly subscription for access. Although YouTube is more popular than ever, it still isn’t making money nearly three years after Google Inc. bought it for $1.76 billion.

Twitter Inc.’s co-founders, Evan Williams and Biz Stone, still haven’t revealed their business model, but have indicated that advertising is low on their priority list. They have suggested they might impose fees on companies interested in mining the data about consumer preferences and peeves that pour into Twitter.

Williams attended Wednesday’s sessions, but didn’t speak up when other executives expressed doubts about Twitter’s revenue prospects. He declined to be interviewed as he left the morning discussion.

Many media executives running long-established companies are wrestling with their own daunting problems as the Internet lures consumers and advertisers away from them. Few of the executives attending the media summit wanted to talk about that trouble Wednesday.

Some of the most best-known people on the summit’s guest list still hadn’t arrived Wednesday as many of the folks on hand embarked on a whitewater rafting adventure.

The prominent absentees included Google CEO Eric Schmidt, professional basketball star LeBron James and Facebook Inc. CEO Mark Zuckerberg — another Internet whiz still trying to prove that his service for online banter will mature into a profitable business.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

The livery on a Boeing plane. (Christopher Pike / Bloomberg)
Former Lockheed Martin CFO joins Boeing as top financial officer

Boeing’s Chief Financial Officer is being replaced by a former CFO at… Continue reading

Izaac Escalante-Alvarez unpacks a new milling machine at the new Boeing machinists union’s apprentice training center on Friday, June 6, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Boeing Machinists union training center opens in Everett

The new center aims to give workers an inside track at Boeing jobs.

Some SnoCo stores see shortages after cyberattack on grocery supplier

Some stores, such as Whole Foods and US Foods CHEF’STORE, informed customers that some items may be temporarily unavailable.

People take photos and videos as the first Frontier Arlines flight arrives at Paine Field Airport under a water cannon salute on Monday, June 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Water cannons salute Frontier on its first day at Paine Field

Frontier Airlines joins Alaska Airlines in offering service Snohomish County passengers.

Amit B. Singh, president of Edmonds Community College. 201008
Edmonds College and schools continue diversity programs

Educational diversity programs are alive and well in Snohomish County.

A standard jet fuel, left, burns with extensive smoke output while a 50 percent SAF drop-in jet fuel, right, puts off less smoke during a demonstration of the difference in fuel emissions on Tuesday, March 28, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Sustainable aviation fuel center gets funding boost

A planned research and development center focused on sustainable aviation… Continue reading

Helion's 6th fusion prototype, Trenta, on display on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Helion celebrates smoother path to fusion energy site approval

Helion CEO applauds legislation signed by Gov. Bob Ferguson expected to streamline site selection process.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.