Twitter’s Business Model: Japanese Style

A couple comments on the launch of a Japanese version of Twitter – complete with advertisements.

1. This is clearly the future of Twitter. Anyone who takes a look at Twitter Japan’s interface has everything they need to know on what Twitter’s non-Japanese future will be, or, at least, should be.

Twitter has reached the point from a critical mass perspective where it’s time to finally turn its strategic sights from getting big to getting business. Twitter is the king of the 140-character messaging space, which gives it the power to make the rules. Look at last weekend’s technical troubles. Instead of Twitter getting pounded, bloggers were literally crying because they couldn’t Twitter. That’s clout!

Twitter can now use its stature to implement a business model(s) with little or no fear that a lot of users are going to flee to rivals such as Pownce and Jaiku. Twitter can roll new versions of the service with advertising a la Twitter Japan, or premium versions without advertising. It can also strike deals with API users to do revenue-sharing.

2. Unless something dramatic happens, Pownce’s prospects of challenging Twitter have evaporated. If Twitter can start to generate revenue instead of just being terribly popular, the 140-character messaging game will be over with Pownce, et al left in the dust.

Truth be told, it would be a shame because Pownce has a lot going for it. But as someone mentioned to me earlier this week, users go where the users are – which is why Twitter has so much traction. Mike Arrington probably summed up in a post yesterday about Twitter’s elite status.

There are many competitors out there, and some of them are better than Twitter. But since everyone is already using Twitter, and the rate of growth is increasing, going to those competitors makes no sense.

As Twitter’s business starts to unfold, it will be interesting to see how it stickhandles the introduction of advertising into the service. No doubt, some people will be upset/disappointed but most of these people will squawk for awhile before pounding out some more 140-character messages.

Update: Privacy has reared its head in the Twitter-Sphere amid reports that someone’s direct messages appeared within the public Twitter stream. It’s just another example about how people forget that private stuff on the Web isn’t guarantee to stay private. If you really want to have a private conversation, use some old technology called a telephone.