Pay close attention – we’re about to hand over an idea that could make Twitter…(drum roll, please)…ONE MILLION DOLLARS.

We saw this today on Tech Crunch (which has since been refuted):

Occasional ads in the Twitter timeline … seems like the only real way to monetize Twitter, aside for premium subscriptions.

It’s an interesting idea. We have long thought that the destined revenue model for Twitter is a new means of advertising where miniature ads will be injected at the end of Tweets.

Your messages on Twitter are restricted to 140 characters. This leaves 20 extra spaces, possibly a lot more with short tweets, before hitting the SMS limit of 160 characters. That reserve is perfect for advertising. We’ve been calling it meme-vertising and we’ve been doing it with our own service PingMe for well over a year – we use it to advertise our own services.

Here’s how it works – we reserve 30 characters in every message that goes out, just enough space to jam a quick meme or ad in there. Anything goes, from “Keep Time with ”http://keeptempo.com">http://KeepTempo.com to “Real men of genius,” if Budweiser decided to buy a block of impressions.

Unconvinced? Twitter’s ad space would be virtually unbounded because the impressions are based on relationships, not page views. Consider that when Michael Arrington sends out one tweet alone, it could provide 13,104 impressions. In the end someone has to pay for a service, especially given the usurious cost of sending and receiving SMS messaging, and nothing stands a better chance of getting Twitter into the black than this virtually umlimited adspace that they possess.

We suggested last week that there’s also money to be made offering business-level service and there is certainly revenue potential with putting ads in the timeline. Yet, I would wager that many Twitter users access the service with a third-party API client and wouldn’t see them. I certainly don’t think that Twitter would abuse their relationship with users by sending pure spam-tweets to your phone or device. We frankly can’t see a better way for Twitter to make loads of money than to use the enormous advertising potential already present in its tweets.

Is it intrusive? To a degree. Although, in the year that we’ve been running PingMe we haven’t had a single complaint, and I think you can see here how it can be done without being an eye-sore:

Note: we haven’t yet taken on third-party advertisers for PingMe, but at some point we’d like to. Let us know if you’re a local bar that might like to have “1/2 price drnx at Moe’s 6-8” show up at the end of a reminder about “Happy hour with Frank tonight at 5.”

We’re on Twitter, too, follow us at: @billymeltdown and @ocskills

We’ve seen mention on a few sites about the potential for Twitter to monetizing their service by charging businesses for mobile interfaces. The case study they quote is a mobile interface for
Harvest.

We think that it’s great that more companies are exploring mobile interfaces like this. Our own small business time tracking system Tempo also
excels at
mobile entry, letting our users record time through Twitter, iPhone, SMS, mobile web, and even desktop mail (much of this functionality is borrowed from
PingMe, a mobile app from birth). While the idea of Twitter as a mobile command line is not new, its always great to see more tools embrace the idea.

So, with a constantly expanding list of services like
Twittercal,
Jott,
Harvest ,
Timer,
RTM,
PingMe,
and
Tempo
all using Twitter, it would seem reasonable for them to monetize these relationships.

That said, even as a company that loves Twitter and already uses it in our apps, the big concern is reliability. Tweets get dropped or delayed more often than we’d like to admit, default rate limits can cause issues, web service calls can cause delays, and the APIs don’t provide scalability to really large numbers of messages. When the service is free these aren’t show stoppers. If charges are involved it’s a different ball-game.

If Twitter were to pursue the monetization strategy the right move would be to provide a dedicated business service. Include guaranteed delivery, improved message processing integrations, dedicated API servers, and quicker processing. This would make the offering very competitive with all of the existing SMS and Text-to-email gateways on the market.

Now that would be worth paying for.

Trying to explain a new technological concept to the uninitiatied, especially something involving social networking, can sometimes be an up-hill task, but it’s a challenge I generally relish.

I came across Melissa Chang’s article on Twitter via the excellent Y Combinator Hacker News. In broad broad summary, Melissa feels Twitter will remain an obscure service in the cultural mainstream (for the time being) due to difficulties in explaining the concept and use-cases.

So I’d just like to address a couple of points Melissa made:

1. It’s hard to explain.

I find it’s very easy to explain, especially to non-nerds, if you tell them “it’s like a slow chat or IM with all your friends.” Elaborating, “your friends’ messages come and go as presence or conversations, and you can reply, start your own, or let them pass by and keep working.” Recent explanations like that have worked for me. Or you tell your neophyte buddy, “it lets you send an IM or text to all your friends at once and they can reply and send you messages, on the internet or on your phone.”

There are lots of neat things you can do with Twitter, so just pick your favorite and say it out loud.

I’m not trying to be a total Twitter advocate here, but I don’t think it’s that hard for people to get, especially for anybody under 25 right now.

2. There is no “key selling proposition.”

See above. There are lots of neat things you can do with Twitter. Just tell your friend what you use it for, in simple terms. “I use it to tell everyone about my cat,” or “I use it to stay in touch with friends during the workday.”

3. People sign up and then leave.

Well, welcome to the internet. But the crux of Melissa’s problem here was not really understanding what to post about. Which I can’t entirely blame her when she first signed up. I think everyone gets that moment at first of, “so… now what? do I put that I’m hungry? I have no friends yet, this is interesting.”

It’s the same with any social network, actually. And I think there’s a huge population of people right now who get that and have no problem sticking around and making use of such tools, linking up with their meat-space friends.

4. The people who don’t use Twitter don’t understand the language of it.

Maybe it’s because I had some experience with IRC back when the crust of the Internet started to cool at the end of the 90’s, but I totally got what the ‘@’ symbol meant and I think most of the young’ins out there get it, too. It’s pretty obvious that those are screen names when you are looking at someone’s timeline (twitter page); people are having conversations.

Update 06-JUN-2008: This plugin now includes acts_as_union, and we moved the repository to GitHub.

A better-late-than-never announcement: we released a Rails plugin a while ago that implements a better, DRYer way to roll network relationships using ActiveRecord. It's called, acts_as_network and it now updated to support Rails 2.0.

So why is this such a problem? It may not be immediately apparent, but the short answer is that these types of relationships usually require 2 redundant rows of storage in your database. Take a social network relationship: one record might say that Jack is Jill's friend, but a separate row must be present to say Jill is Jack's friend.

acts_as_network does away with this nonsense, and lets you say implicitly that If Jack is Jill's friend then Jill is Jack's friend. Or, in Ruby

# Jane invites Jack to be friends
invite = Invite.create(:person => jane, :person_target => jack, :message => "let's be friends!")    

jane.friends.include?(jack)    =>  false   # Jack is not yet Jane's friend
jack.friends.include?(jane)    =>  false   # Jane is not yet Jack's friend either

invite.is_accepted = true  # Now Jack accepts the invite
invite.save and jane.reload and jack.reload

jane.friends.include?(jack)    =>  true   # Jack is Janes friend now
jack.friends.include?(jane)    =>  true   # Jane is also Jacks friend

The syntax is clean, and it stores only one row in your HABTM table. Online Documentation available or install/upgrade the plugin:

% script/plugin install git://github.com/sjlombardo/acts_as_network.git
% rake doc:plugins

Much thanks to Maurycy for submitting patches to AAN!

Note: for a more in depth look at the acts_as_network syntax and usage please check out the original release page.

We had an interesting request not too long ago for Tempo. Basically this user was accustomed to logging his time in minutes instead of hours. He found himself having to calculate 90 minutes into 1.5 hours to make new entries in our system, and asked us if there was some way to accommodate this other method.

It’s still a bit experimental at this stage, but if you put put an ‘m’ after the number in the hours box, it will get interpreted as minutes and converted for you by Tempo:

This also works when posting by e-mail. In addition, you can always use an ‘h’ after the number to clarify that you are submitting in hours if you wish.