Twitter CEO Dick Costolo believes that commerce is a big way Twitter can make money. He’s right.The question is how.
After all, a lot of commerce happens on Twitter already. Whether it’s through discounts that serve as a form of advertising, or to move unsold inventory, plenty of businesses already do commerce through Twitter. And Twitter doesn’t get paid for that.
One way Twitter could get money from that would simply be to say “Hey, if you want to sell things through Twitter, you’re going to have to give us a cut.”
But that would alienate the brands that Twitter needs to also buy ads (and populate the service, thereby making it more valuable).
One way in which Twitter can make money, Costolo said at a Fortune conference, is by “removing friction.” If you have to go to click a link and input a discount code, that creates friction in the transaction. Which means less people buy. Which means the company doing the selling loses money.
That makes us think that Twitter should (and perhaps is going to come out) with its own checkout service, built into Twitter.com, and perhaps its mobile apps (although that might create problems with Apple).
A commercial offer on Twitter wouldn’t be a pitch followed by a link, it would be a pitch followed by a “click to buy” button. Click once. BOOM. You’ve bought it. Twitter’s chairman and product leader, Jack Dorsey, knows a thing or two about building a seamless payments experience from his other company, Square.
That would probably drive sales up, which means it would make sense for retailers to kick a cut of their commerce interaction on Twitter.
Twitter would then become a sales channel for a lot of companies. They would get qualified prospective customers (after all, if I choose to follow @Dell, odds are higher I’m in the market for a laptop) waiting for offers, and a great way to sell to them. And those brands would also buy Twitter ads to add followers to their commerce accounts.
We can’t wait.
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