Twitter Could Be So Much Better Than An Advertising Company
If you’re a business with enough users, you can probably make some money by placing advertisements. Advertising drives commerce, and commerce is fundamental to a healthy economy. It’s a great and wonderful thing that profits are earned, jobs are created, taxes are paid, and a virtuous cycle develops around the commerce that results from advertising. However, just because Twitter could make a lot of money in advertising doesn’t mean that advertising is where it should concentrate the majority of its efforts or where its most fundamental value proposition lies.
For example, one can now gather from Twitter’s IPO that it’s fundamentally postured as an advertising company, but its real value isn’t in advertising. Twitter’s most fundamental value rests squarely within data analytics. More specifically, Twitter’s most fundamental value is in the overall collective intelligence of its user base when interpreted as an interest graph. Think of an interest graph as a mapping of people to their interests. In other words, if you follow an account on Twitter, what you’re really saying is that you’re interested in that account. Even though there’s lots to be gleaned in all of the little 140 character quips associated with a particular account, there’s a good bit you can tell about a person by solely examining the accounts that the person follows.
Twitter’s most fundamental value lies within the overall collective intelligence of its user base when interpreted as an interest graph.
While it’s certainly the case that Twitter is littered with plenty of low-value content (both human and spambot generated), plenty enough signal can be teased out of the interest graph derived from Twitter’s ~900 million registered accounts (with ~232 million accounts being active monthly) to create fundamental value of mammoth proportions. Twitter can tap into that collective intelligence to bootstrap recommender services and place more effective ads while people banter back and forth, but ads would be a pretty base end game when you consider the nobler purposes that you can achieve with that kind of data.
Twitter should not be an advertising company; ads should just be the means to an end. Twitter should embrace its nobler identity as a data analytics company and focus on the stuff that really matters.