Top story in today’s Section 2 from OnlineMediaDaily:
Twitter Eyes Charging Firms As Startup Valuations Drop
Yes, the darling application of the microblogging world comes one step closer to a real (e.g. sustainable) business model. Don’t get me wrong, I love Twitter; it’s been the jumping point for a lot of my recent work, including my posts at the Touchbase blog. However, the dependency on VC dollars is something that wouldn’t last, especially in this economy. In particular:
Twitter, the wildly popular microblogging service with no business model, may be forced to charge companies for access to its users, founder Evan Williams told Bloomberg News. Williams, who recently replaced Jack Dorsey as CEO, said he wanted to start weaning the company off venture capital, especially as the economic climate sours.
Adopting a sustainable model may become a priority for other start-up firms:
According to Michael Patrick, a partner at the law firm Fenwick & West, startup valuations have fallen at least 20% in the past year. Bloomberg noted that the fall in valuations comes at a time when many young Silicon Valley firms need to raise more capital just to survive.
The lessons here:
- Sustainability is more than a good idea, it’s a business necessity.
- Twitter established microblogging, but Yammer and Qikcom are perfecting the model for private networks.
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