TWITTER

Nick Halstead wrote an interesting post yesterday about Twitter's intention to limit API calls to 20,000 calls per hour. Nic Brisbourne also chimed in and both tend to be in agreement that this is really the only revenue model that makes sense.

While I agree that all signs point to Twitter taking this option, I don't think it is the best move. Charging app developers for API calls will inevitably stifle innovation on the platform, much of which has been the reason for Twitter's overwhelming success and adoption. I also think that many of those 'here today, gone tomorrow' Twitter apps have contributed as much to Twitter going mainstream as some of the longer-lasting andrecently-funded client apps because of the hype and general interest they offer non-early adopters who otherwise often fail to see any interest or immediate value in the service.

So how should Twitter make money?

I have believed for some time that Twitter (or a tool like Twitter) could be a killer enterprise application for which major brands would pay large subscription fees. BUT, not in the way Yammer is marketing itself as a domain-specific corporate messaging solution.

The holy grail of marketing is getting as close as possible to your consumers to hear exactly what they are saying about your brand. Twitter is in a unique position both to supply incredible insight into brand perception and enable consumer brand engagement along similar lines to FreshMinds' FreshNetworksventure. There is a killer market research app in this data, for sure.

But perhaps the greatest potential for tools like Twitter in the enterprise is in customer support. Although many don't like the inevitable invasion of big brands on Twitter, it could have a significant benefit to us as consumers. A small tweak to the Twitter Direct Messaging service could route a customer support query directly into a customer service centre (Twitter charges for Enterprise integration via the DM service perhaps on a per-request AND annual subscription basis). Not only would the consumer potentially have MUCH IMPROVED access to Microsoft, Apple or whoever it is but the enterprise would have a ready-made customer engagement system that can make intelligent use of historic data for customer support efficiencies and future insight.

In summary, anything Twitter does to stifle innovation from a developer point of view is unwise and charging for API usage fits into that category. On the other hand, Twitter has the eyes and ears of a growing number of super-valuable early-adopters with whom big businesses SHOULD be interested in communicating better.

BUSSINESS IT ONLINE(BIO)

I'm hoping you've seen today's announcement that Business IT Online (BIO) has extended its range of offerings for small businesses to include an online office supplies shop.

By adding a fully-stocked e-commerce site to BIO's offering, we can now justifiably call the site a one-stop-online-shop for small business services.

So, why did we do it? Why did we do what nobody else has done (to my knowledge, anyway) and release an e-commerce site alongside our web-based software applications for small businesses?

Here are some reasons why:

1. Because our vision for BIO has always been for it to be a 'one-stop-shop' solution.

While those with plenty of loose change may opt to shop with specialist suppliers and pay a premium for specific services, those that are looking to save usually look to the likes of supermarkets and one-stop-shops for savings on price and efficiency. This is confirmed by excellent performance from supermarkets relative to the broader retail sector since the recession hit hard.

Small businesses are relatively cash and time poor. The more tools, web sites, applications and services required to perform their day-to-day activities, the more inefficiencies that are introduced into their lives. Inefficiencies hurt small businesses. BIO's objective is to reduce these inefficiencies and make the running of a small business easier by offering integrated services on one site.

2. Because e-commerce is good business.

Nic Brisbourne recently referred to projections from Forrester that 2009 will be a good year for e-commerce. There is still plenty of room for growth in e-commerce over the coming years as more and more people realise the benefits of shopping online.

There are a good number of ways for us to innovate in what is a relatively tired area of retail and while many of the large industry incumbents are battling to win blue chip accounts and managing a lot of costly inventory, we intend to provide an outstanding service for SMEs.

3. Because we are revenue-funding the business.

Web 2.0 is full of businesses that have successfully raised millions of pounds in funding for their Internet ideas. Some of these are pre-revenue and many of them are pre-profit.

While the VC-funded Web 2.0 bubble has been exploding, with mixed results for investors, we have beenbuilding a business that uses sales to fund growth. So far, we've successfully combined a subscription model with an advertising model and now we're adding a third revenue-stream to the site to further bolster sales in the form of e-commerce. Revenue-funding might be less sexy. But it works.