Thinkubator – A Thoughtprocess Interactive Blog

Ask me which of these two social networking giants I prefer and I’ll tell you Facebook. Now ask me which of these two I think will still be around in 5 years. I think you might be surprised to hear me say Twitter. Honestly, I’m kind of surprised by it too – but hear me out.

Obviously, both of these networks hold value (and/or create value) for their users. Both are very popular and both are adding members like mad. Both are also likely to take a hit in membership over the next several years as users grow bored with them and move on to the next big thing (which will probably be something from Google – like everything else). That said, if you had to hedge a bet on the success of one or the other, you might be inclined to go with Facebook since 250 million users is a lot more than somewhere around 5 million (though no “official” membership data has been released by Twitter). But it’s another shared characteristic of both networks that gives me pause: each has yet to turn a profit.

Popularity aside, we all know that nothing is free – and if these networks can’t figure out how to turn their fame into fortune, they’re sunk. Both have legions of super-smart people working tirelessly to try and figure out how to be profitable.

So why do I think Twitter has a better shot? Two reasons:

1. This article from today’s NYTimes.
2. And this article from Newsweek.com.

I found the most important information in the Twitter article to be this:

Twitter, which does not yet make money, is now concentrating on teaching businesses how they can join and use it, Mr. Banerji said, and the company plans to publish case studies. He is also developing products that Twitter can sell to businesses of all sizes this year, including features to verify businesses’ accounts and analyze traffic to their Twitter profiles.

For the Facebook article, it’s this:

The paradox of the social network is that trust—the very lifeblood of the site’s growth—may be the same thing hindering its financial success. Recently, the company faced a series of heavily-publicized battles when users were turned off by Beacon, an initiative by the site that targeted advertisements at individual users without their consent. After many Facebookers protested, discussions arose over what information Facebook owns about each of their users, and a new privacy code was established on the site.

Facebook members have grown too comfortable with the idea of the site being used for any purpose beyond the one it currently serves in their lives. They don’t want to get messages from advertisers in their inbox (even if they really might want what’s being peddled), they want messages from friends. Period.

Twitter on the other hand is new enough not to have fully cemented this kind of relationship with their users, and already seems to have an audience that is more open and accepting of commercial overtures. What’s more, some of the possibilities for revenue opportunities they’ve floated seem like winners. If I was a business owner or celebrity, I’d be more than happy to pay for the ability to weed out imposter accounts or access analytics of my profile page (at least one of which should be possible and free to begin with, but that’s a topic for another post).

Anyone disagree?