At Fortune’s BrainstormTech conference, Twitter CEO Dick Costolo said he still believes in commerce as a potential revenue stream for Twitter, Dan Primack writes.
It’s interesting because Twitter’s previous attempt at a commerce product, the @EarlyBird account, flopped.
That being said, Costolo is right. There are two big opportunities for commerce on Twitter:
- Discounts. Twitter is a broadcast medium, and as such, is great for advertising. And discounts are a form of advertising: get people to buy something from you 20% off in the hopes they’ll come again and buy full price.
- Inventory management. This is where Twitter can really add value. In many businesses, unsold inventory is a net cost, and you want to sell that off at any price. Costolo took the example of a sports team that sold unsold tickets on Twitter. The real-time nature of Twitter means it has a lot of potential to become a unique sales channel for unsold inventory.
There’s only one problem, though: brands can (and do) already do all that stuff without giving Twitter any money. If companies want to offer discounts or sell inventory through Twitter, they can do that, and it’s free. Twitter might get money from that indirectly as brands buy new followers for these accounts through Twitter advertising, but that’s not where the big money is.
Of course, Twitter could just say: “Hey, if you’re a big company and you want to do commerce through Twitter, from now on you’re going to have to give us a cut,” but it would be very risky to alienate the big brands that Twitter depends on for growth.
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