Twitter Foresees Paid Services Supporting the Business in the Long-Term – Not Ads

On Monday, Twitter co-founder Biz Stone told a panel at Reuters Global Technology Summit in New York that he envisions enhanced services, not ads, serving as a likely option to sustain their business over the long-term.

This is in contrast to what many have been speculating, including us.

Currently backed by investors, Twitter has been exploring a range of options to run a profitable business while continuing to offer a free service to its users, now at 17 million according to comScore data.

Rumors have been flying around that Twitter, like most start-up websites offering a free service to users, would use ads as a way to generate revenue. Stone put those rumors to rest, explaining that “there are a few reasons why we’re not pursuing advertising – one is it’s just not quite as interesting to us.” He went on to say that they don’t currently have, nor do they plan to hire, a team with the expertise capable of implementing an advertising-based business.

When asked how they plan to reach profitability, Stone said there are a few options they’re exploring, one being Twitter paid services.

With its tremendous growth over the past several months, businesses have begun to take full advantage of the unique, powerful micro-blogging service. Beyond using Twitter to engage with customers and other potential brand enthusiasts, businesses are also using it as a way to both market and service their products and solutions.

While there are a ton of third-party apps that currently help businesses manage their Twitter accounts, Stone feels there’s a demand for additional tools, including “lightweight analytics”, and expects they’ll be rolling out some of these tools later this year.

Beyond analytics, a commercial directory in which businesses can confirm their identities in Twitter is also expected.

These aren’t the only options they’re taking a look at – another includes revenue-sharing agreements with cell phone carriers – but they sound promising.

I agree that there’s a demand for both better analytics to better understand the impact of the time investment of Twitter, as well as legitimizing accounts, both of which are services Twitter is best suited to provide. I expect the costs for such paid services to be relatively minimal when they do roll out, and the demand to remain high as such costs will be outweighed by the value that they bring.