When newbies sign up to Twitter now, they are presented with a list of 100 suggested users to start following. Simply being on that list can boost your followers well above 100,000. Several people and organizations on the list (such as Al Gore, Lance Armstrong, Kevin Rose, the New York Times, and CNN) now have more than 250,000 followers each. Many of the most popular Twitter users are on the list, including TechCrunch (we have 214,465 followers). It is insane.
Mahalo CEO Jason Calacanis, who is no Twitter slouch himself with 61,266 hard-earned followers, thinks that being one of the top 20 on the suggested list will be worth as much as a Superbowl ad within five years. He is offering Twitter $250,000 to lock in a spot on the suggested list for two years, or $120,000 for one year. I emailed Calacanis (who is our partner in putting on the TechCrunch 50 conference) and he confirms the offer is dead serious. In fact, he contacted Twitter co-founders Jack Dorsey and Evan Williams last week about it, and is lobbying investor Fred Wilson. Calacanis writes:
I believe that in five years the top 20 recommend slots will be worth $1m a year each–super bowl commercial level in fact.
. . . this is 100% dead serious. I’m thinking of sending the check today anyway…. if it sits on their desk they might just cash it.
He wants to lock in the price now because he thinks it is a great marketing opportunity. It is not unusual for people on the suggested list to gain 10,000 new followers every day. That comes to 3.6 million a year, and even if half unsubscribe, that is still a direct channel to more than a million potential customers. Those are customers who feel a connection with you because of the personal nature of Twitter messages.
If other companies feel the same way, sellingthese slots could be a lucrative side business for Twitter. At $120,000 a pop, 20 slots would generate $2.4 million in revenues the first year. There are already brands on the suggested list, such as JetBlue, Zappos, Whole Foods, and Dell Outlet. Why not make them pay? To avoid spamming, Calacanis suggests a simple rule:
people who buy the slot will lose it if they abuse it. they are limited to 10 tweets per day and they can’t spam the list. if I suck folks unsubscribe. if i spam (i.e. go above 10 tweets per day) they knock me, jetblue or Zappos out of top 20.
I think Calacanis just can’t stand the fact that he is no longer one of the top Twitter users and wants to buy his way back to the top. Dave Winer argues that the suggested list is a bad idea in general. But maybe Calacanis is onto something. How much do you think a top-20 Twitter slot will go for in one year?
I love this post. I hope it opens up the eyes of many people that like to say “Twitter doesn’t know how to make money”… or for any other site.
Not everything is ads or subscriptions.
get real pal. it’s like paying google for a higher placement. the moment you do it, you’re dead
Yeah, that AdWords stuff is pretty killer.
well, with adwords, it’s obvious that this is paid for.
with twitter’s suggested users list it isn’t. that’s what sucks. people would follow a lot less if they knew these guys (or brands) paid to be featured.
I have to say I agree to a point. If people know that those spots are paid, I think they would be less likely to follow them.
I think that for the most part your typical user wouldn’t know it was paid for or care. Sure, we might, but then again, we’re reading TechCrunch and wearing pocket protectors. Your average use would not know the difference.
Its kinda like paying to be on the Digg homepage
well digg will cost $200 to be on front page
TC wasn’t writing about Mahalo anymore so Mr. Calacanis had to make a move. What is being on TC so many times worth?
It does not really make any sense …
Getting a load of followers is different and followers actually reading your tweets and following your message is different.
If Jason gets 1 million followers and sends 10 tweets a day, can he give a figure on the number of people following his tweets?
Twitter needs to figure out a way to reduce noise before thinking of making money.
Well,
You just need to follow click through rates from those followers that subscribed through this list to know how efficient this is.
It is not unlike Direct Mail where people get a lot of spam in their mailbox, still reply to some and (good) marketers know the efficiency rate for each list they used.
Sounds like Twitter is getting closer to becoming a cash machine. It’s just a matter of time before they finally monetize their audience.
Actually using some of the URL shrinking tools you can specifically track what was ‘clicked’. So yes Jason and everyone else could, in a very targeted fashion, id who clicked a Twitter link.
I’ve found from the numbers within the network of publishers I have so far at TwtAd.com that people actually do click the links the people they are following post.
I have publishers with a couple thousands followers that easily get a 100 clicks within a few hours of making a post. Twitter traffic has actually shown to be pretty impressive.
Good Point!!!!!!!!
Agree. Short term gain for long-term loss. Twitter is about who actually wants to know what you are dong hour by hour, because when they see you, your lives are somehow closer. Otherwise, just more email noise.
There is a simple way for Twitter to reduce the noise and make a ton of money with a proven golden goose. All they need is to use data mining to package the enormous amount of information shared on Twitter every day by topic.
Then they could sell featured Twitter user spots AND targeted ads that would benefit small businesses the way AdWords once did.
Well it would potentially be quite damaging to the user experience if all the recommendations are solicited.
I expect there are much better and more imaginative ways for Twitter to be monetized, without sacrificing user experience so much.
just another staged gimic
Paying for visibility is the basis of the advertising revenue model. This is advertising.
Personally, I believe this is just a buzz made to showcase Twitter’s revenue opportunities and smooth the way for a big partnership or even acquisition.
Jason has it exactly right. Twitter is a communication channel. It is about building an audience and influence for many larger brands to communicate with. There is huge value in the number of followers if leveraged properly.
People will pay for inclusion in this list. This is just a paid placement model and it works.
I have blogged about this and did twitter mockups a while back. Cheers!
http://www.twit...sion-has-begun/
Anything else then Twitter Erick? just wondering because the last 9/10 of your articles are about twitter.
best thing I ever did on twitter was to stop following Jason Calacanis. Dude needs to get over himsefl
JC has a way with marketing, I guess. He knows the check will never be cashed and he will get tons more exposure for free. It’s also a way for him to get his apparently under-performing startup some free press by associating himself with the most buzzed about startup around today.
I disagree, I use to knock Mahalo but the vision is coming together with the release of Mahalo Answers, and their integration with Twitter was pretty slick too. I wouldn’t classify it as under performing but I do think the amount of money he raised is ridiculous these days. But then again, his approach is human-powered and thereby somewhat capital intensive. Good for him though, he’ll be able to ride out the pull back while others are under the hammer of doom.
I think tech entrepreneurs/analysis often suffer from having their head stuck in the cloud — no pun intended — and forget the needs of mass America, IMO.
Actually the integration of twitter search in Yauba is really slick:
http://www.yauba.com
Well put. You nailed it. The cheque won’t be cashed, but he will get a million dollars in exposure. Great PR.
Yeah, this sounds like a marketing ploy to me, as well. Calacanis knows damned well that Twitter isn’t about to sell him a top spot, but by saying that he is seriously trying to purchase one, Calacanis will get a bunch of free publicity. Well played Calacanis…well played!
I think Ev should actually take the $250,000 and bet it all on Howard Lindzon in the Calacanis/Lindzon charity boxing event. OR, better yet, bet it all on the Ref!
Amen. Best advice I’ve ever heard re: Calacanis.
At first glance it seems ridiculous, but the reach is pretty impressive. 3.6 million followers in a year, at 10 tweets a day…. that’s a lot of advertising.
go ahead and pay $250 000 to spam users.
This is beyond dumb. Just 2 weeks ago, he listened to Loic’s ill advise and “unfollowed” everyone on his account.
Now, he is thinking of being in the top 20? Talk about being selfish. When you want people to listen to you, you should also, at least “pretend” to listen to others. I am not saying follow everyone back but at least don’t flush your entire list.
true. what particularly sucks is that they used autofollow first and THEN, once they thought they gained enough followers, flush their lists. as without autofollowing, they would have never gained so many users in that short amount of time. i mean, who the fuck are these guys? ask anybody outside of the silicon valley or tech industrie and nobody knows them.
o’reilly at least accomplished something and he never used autofollowing to boost his ego.
but of course, with the suggested users list, the whole thing is even easier. we should get rid of the idea that quantity means anything.
take a look at wallstreet. i’d bet everybody would trade in a lot of “quantity” for a little bit more of “quality”.
Is this guy for real? I honestly have to say this and sorry to people who knows him personally.
What an asshole.
Hey, it’s my personal opinion. :p
So now other people are coming up with business models for Twitter? When will they come up with their own?
who gives an arrsss about this kind of pr? how much do u want to offer for twitzu? gee….
This is the best thing I’ve seen CalacANUS come up with. Smart forward thinking.
Think you’d actually have to credit it to the people he’s talking about that are talking about doing this.
I un-followed him and all the other unwanted spam personalities.
This is such a moronic retarded idea, that techcrunch simply couldn’t miss it.
If people on the suggested list get thousands of new followers per day, maybe that’s because they’re decent suggestions. An irrelevant advertiser that has paid for the placement will not be as compelling to new users.
Exactly. It’s diminishing returns and a bad business model. There are much more exciting things to do on Twitter.
I cannot believe I had to read this far down before somebody (Doug) got it right…Paying for a suggestion is far, far different than being placed–the placed suggestions actually have widespread appeal. Sure, he would add followers, but 10k a day is a ridiculous estimate.
Realistically, twitter could add a couple of paid suggestions, but diluting the suggestions with morons wouldn’t be a net benefit.
Potential revenue stream for Twitter for sure, especially in regards to their search.
While the egocentric nature is a bit over the top, I do think he is on to something in terms of corporations being able to reach people instantly. That said, I find the whole recommendation aspect of Twitter a bit disconcerting. Not sure why they are playing this card in terms of recommending top followers–do any of them say anything interesting or that serves a purpose? If Twitter wants people to explore, perhaps they need to think of more illustrative way than just showing a list of people who just happen to be celebrities in some fashion.
Has anyone else pointed out the fact that many people on Twitter (if not most) completely ignore most of the tweets sent by people they follow?
Furthermore, if I saw NetFlix and JetBlue and Mahalo as suggested people to follow, I would turn those suggestions down.
“Has anyone else pointed out the fact that many people on Twitter (if not most) completely ignore most of the tweets sent by people they follow?”
I think most people ignore this fact.
Very similar to how everyone ignored the fact that nobody actually used SecondLife – they just looked at the accounts created numbers and came up with wild figures on its value.
this is a really interesting concept. i see how this could be used for good, but what i really think will happen is the richest companies paying the most to get on the list and then the list becomes useless and loses its value. but, even if rich companies get on the list, people have the ultimate power by unsubscribing to them. they’ll realize they are wasting their money and hopefully only truly *good* people to follow will be on the list. we’ll just have to wait and see i guess
Exactly. I mean, imagine if Google have a similar web sites suggestions at start page, imagine Technorati, Facebook, etc. But because people are so convinced that Twitter will make money, they seems to forget to put things into perspective. It’s completely against the Internet idea and I’m sure Twitter will never do that kind of thing. In fact, they should remove that list now because I think it’s not a good way to retain new users by suggesting them rivers of messages from which they will be overfloaded right from the start. My guess is that they will go with less intrusive advertising and marketing stuff like all the others are doing.
Most conversations on twitter are one way. People care only about is posting the last moronic, inane thing they did.
“Took a crap early today and ate a bowl of wheaties”
Not many pay attention to incoming tweets.
There are lots of compelling people on Twitter. I’d consider it a waste of my time to tweet my bowel movements – and to read the tweets of others who would write about that. I’d immediately unfollow and save my brainspace for something more worthwhile.
It’s genius. Twitter’s a super fast way to grow audience (at the moment.) Also, Calacanis knows that web personalities are now competing with media personalities on Twitter. A move like allows you to buy a boost that will become increasingly difficult to obtain through the long tough slog of spitting out good tweets. The point it that their giving it away now and he’s offering cash, even if it’s only $250K.
Interesting proposal and potential revenue generator for Twitter. Bluemonster creating “next big thing” in SN that will be more influential than FB and/or Twitter and will allow USERS (as a group) not me, to be hugely influential with it. Restoring Power to the People. Your input welcome. Stay tuned.
I can’t wait. Now what or who is bluemonster?
They’ll be like super bowl ads… and provide about as much value.
Twitter is the Members Only jacket of the Internet. To think that it will even be around or popular in five years is laughable.
Maybe he should focus more on getting mahalo out of the deadpool rather than how to spend the salary duped investors gave him.
Yeah, he will not spend the money – but atleast via the news he get’s the next 60k followers … already 30 more.
has someone pointed out to Jason that his move is like the SEO people he blasts?
this seems pretty crazy. $250,000 for two years on a twitter account? I suppose I don’t like the idea of buying followers.
I wouldn’t pay a single penny. It is more important to get your target audience following you. Unless you are dealing with mainstream stuff this will not do you any good. I would pay to stay off that list though.
Thomas I think the idea here is that you’re part of the suggested group and only non-spammers would be able to buy one of the ten slots. You would have to earn the followers after that (and of course they are opting in in the first place). If you suck or tweet too much they unfollow and you’ve wasted your money. Also, you could limit these accounts to five to ten tweets per day…. further ensuring quality. also, you could only offer these to super qualified companies/brands like Zappos, JetBlue and Lakers.
Twitter is dead. Sell now and split. You will not see the same Facebook phenomenon. Twitter CEO should take is millions now and split.
As times a changing faster that you can shit. Thus bro innovation will KIL twitter like a bird on a branch hit by a pebble from a sling shot.
You cannot say I did not tell you all. Take the 500 mil bro and split. If you can fool them in paying you 1 bil take it and RAN. ot RUN
Last I checked, infrequent tweets does not guarantee higher quality, nor does frequent tweeting guarantee lower quality. To say that fewer tweets means they’re better thought out means ignoring cases like, well… you.
last tweet:
“Santa Monica Pier Fishing… If only I could spend a day.”
five seconds of my life… gone!
Ah yes, more circle jerking as Rome burns. Ah, I take that back: Nero actually knew how to play an instrument. [h/t Maher.]
endlessly
The suggested list feature isn’t bad per-say, it’s just terribly implemented. JC’s offer illustrates this well.
If Twitter could ask you some questions first, however, regarding your general and/or more specific interests and THEN provide 100 recommendations, I think it would make a lot more sense. A Mac nerd coming to Twitter is interested in very different things than someone coming to the service obsessed with stalking celebs, for example. Likewise, a Japanese or Chinese user is going to be primarily interested in interesting people who Tweet in their own language (or a mix!).
Suggesting prominent members in a Twitter “community” is one thing, placating to maniacal self-promotors is an entirely different story.
Better yet, Twitter should introduce newbs how the search feature works, which is ultimately a way better and genuine way for discovering real commonality in interests.
Well said. People could easily self-assign to interest categories and would be highly motivated to do so. Twitter could absorb some better features of follower-suggesting tools which themselves are largely designed to help you boost your own base. Real recommendations based on shared interests would be enormously helpful and make someone like me actually want to spend more time on twitter.
“Suggesting prominent members in a Twitter ‘community’ is one thing, placating to maniacal self-promoters is an entirely different story.”
I think people would get over it. No one much seems to care that Defamer is a suggested user. Can you really argue that Defamer is more worthy of being suggested than Calacanis? Defamer??
“Better yet, Twitter should introduce newbs how the search feature works, which is ultimately a way better and genuine way for discovering real commonality in interests.”
Note that Twitter has featured users on the sidebar of the search results. So doing Twitter searches won’t prevent noobs from looking at featured users.
"…super qualified companies/brands like Zappos, JetBlue and Lakers…and Jason Calacanis." But I think Jason’s right. Two years from now, how much would it be worth to have direct communication with hundreds of thousands of opted in followers 10 times per day?
If I get 10 tweets a day from most people > Unfollow. Now, if they added value by, say, providing an otherwise unobtainable discount to use for purchasing a service or product, that might be worth Following… but only if no more than one tweet per day.
Really, does that kind of a suggestion engine really work for anyone accept the most newest of users? and then beyond that–is there really that much deep interest in what Jason and Scoble and others of the “top tier” Tweeters have to say?
For NYT, CBS, CNN etc, I can argue it but I can see it. For others is this more than an ego drive?
The door opens further if they expand it beyond the "top 20" to the "top 20" in a variety of categories/topics. The first page you see when you sign up is a page with a variety of topics/channels to scan and choose from. Then people could browse the topics and pick from there. Price for a slot in each topic varies depending on the popularity of that topic/channel.
A “Suggested List” is a great idea. As long as it is separate & more than clearly evident that a user has a choice to add that. The way they have it now, kinda sucks now, because if you want to sign up fast, the box is automatically checking on all those users. You have to Opt-Out of checking on these suggested now.
Paid for spots should have a completely separate section. Consumers/Users/Twitters’ need to have choice & that choice needs to be completely evident.
With that said, I think Jason would reduce his $250,000 down a couple $100,000……
No body gives a shit what CalacANUS is tweeting about anyway. He is too self absorbed to provide value to be featured on the list. Paying for followers is almost as bad as paying for sex.
It’s almost as bad as forcing a bad pun by capitalizing it.
He’s not paying for followers, for the LAST TIME. He’s paying to be a featured user. No one will hold a gun to your head and force you to follow him.
someones got blue bird jealousy! *pinches checks*
If twitter decides to take this seriously, an auction would be an even better idea. let the market decide how much the top20 list is worth. Auctioning off the spots may yield a lot more than just $125k
Jason, wanna pay off my mortgage? I’ll put a Mohalo logo on the garage door.
Twitter in 5 years… Who’s Twitter?
Mahalo in 5 years… Who’s Mahalo?
Makes sense
.
It doesn’t matter if noboby knows what Mahalo is in 5 years because at that point it will have already been sold. Twitter will probably be bought within 5 years as well.
If it’s a user experience FAIL, then the idea will likely be considered by Twitter. Would change the experience in the WORST way, in my opinion. I would rather them charge us all something, than a few elitists with thousands upon thousands of dollars to spend, to be Mr. Suggested User of the Month. Whatever.
yeah, I guess I just like the idea of followers being grown organically rather than buying them. Not sure why exactly but it just doesn’t sit right with me. Already though I’m not a fan of the Twitter suggested users feature. It seems their initial choices were so random. Why Whole Foods but not say Leo or Scoble? Why some obscure band that I’ve never heard of or care about? I’d rather see a suggested user engine really geared towards users you might like and more authentic than something people buy.
I think it undermines a site’s sense of community when you begin allowing people to buy their way into a top community spot.
If only Jason could limit himself to 10 plugs a day. This guy started Mahalo to fight internet pollution, only to become the biggest social media polluter around.
Boy what a bunch of crap. Sure Money can buy ANYTHING but what the hell happened to ppl deciding who to follow, what happened to ppl making a choice? I agree with a lot of the comments on here especially ” igniman get real pal. it’s like paying google for a higher placement. the moment you do it, you’re dead.” I cannot predict where Twitter will be in 5 years so I cannot say but I can guarantee ppl are a lot smarter than these “Guru’s” are making them out to be. Good luck
Did John leave an envelope in his desk before he left?
How about actually doing something worthy of a follow? Silicon Valley is becoming as self important as Hollywood. Get out, do something amazing, earn your following. But I supposed if you’re stupid enough to pay for a slot, more power to you.
Nice article! Check out my similar site at http://macmaniapodcast.com
stop spamming us.
You have to walk a tight rope between social networking and full commercial use. This might cross the line a wee bit.
twitter business models
it is becoming a global sport
Dell says it’s seen $1m in sales from links pushed through Twitter, so if Jason can sell something useful that way then it seems like a great investment.
Interesting. If Twitter could track conversion rates from all links passed through its fingers to all purchases made, maybe the affiliate sales revenue would add up.
“sellingthese slots could be a lucrative side business for Twitter”
Uh, side business to *what*?
to search, premium accounts, and other ideas which will drive far more revenues.
There can’t be a side to nothing.
The more lucrative it is, the less valuable it becomes. Seeding a page of 20 recs with a couple of clearly labeled paid slots is one thing, cashing in fully would make the feature completely useless and trashy and create the worst possible first impression of twitter for new users.
Wow! This takes the entire concept of Guy Kawasaki’s social media whores to a new level…
But I find this model pretty interesting and would this as long as new users KNOW which ones are genuinely the “Goog-Guys” to follow, and which ones pay their way to the top- at least like Google’s sponsored links.
Please elaborate on Guy Kawasaki’s concept of social media whores.
Sorry….TAKE THE MONEY AND RUN!