Twitter Business Model: Shopping?

Friday’s New York Times analyzes a quote from one of the VCs that has invested in Twitter. We learn that shopping and e-commerce might play an important in monetizing the social network’s product recommendation traffic:

Someday, when you ask your Twitter followers to recommend the most comfortable running shoe or the best digital camera, you might be able to go one step further and buy the product on the Twitter site.

E-commerce, including links to products and turnkey payment mechanisms, is a likely revenue stream for Twitter, said Todd Chaffee, a Twitter board observer and general partner at Institutional Venture Partners, which has invested in Twitter. (…)

Many companies are already on Twitter, monitoring what customers say about them and offering discounts and promotions to their followers. And many people use Twitter to ask for recommendations, like which type of gadget to buy or which movie to see. Since Twitter is already becoming one of the best shopping resources, Mr. Chaffee said, why not enable people to make purchases from the site as well?

“Commerce-based search businesses monetize extremely well, and if someone says, ‘What treadmill should I buy?’ you as the treadmill company want to be there,” Mr. Chaffee said. “As people use Twitter to get trusted recommendations from friends and followers on what to buy, e-commerce navigation and payments will certainly play a role in Twitter monetization.”

(seen in Mashable)

What it means: for Twitter, everything points in the direction of word-of-mouth monetization through shopping. E-commerce is a low hanging fruit given the strong existing affiliate program eco-system on the Web but the natural extension for Twitter will be local merchants (including services). And what is the equivalent of e-commerce affiliate programs for local? Possibly request-for-proposals and pay-per-call.

Update (June 22, 2009): Evan Williams, Twitter’s CEO, replied to the New York Times article and, according to ReadWriteWeb said “To be clear: Todd is a Twitter investor and a very smart and helpful guy. However, he is not actually on Twitter’s board and, in this article, he’s brainstorming on his own. These are not in the least bit concrete plans of the company.” I’m still convinced they will go in that direction. It’s a completely natural evolution, whether they want it or not…🙂

If interested, follow me on Twitter at @sebprovencher

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