SUN VALLEY, Idaho (AP) — It turns out the media elite aren’t so different from a lot of less affluent people: They think Twitter is a great communications tool, but can’t figure out how the online messaging service will make money. The recurring doubts about Twitter’s moneymaking potential cropped up again Wednesday as an exclusive […]
SUN VALLEY, Idaho (AP) — It turns out the media elite aren’t so different from a lot of less affluent people: They think Twitter is a great communications tool, but can’t figure out how the online messaging service will make money.
The recurring doubts about Twitter’s moneymaking potential cropped up again Wednesday as an exclusive media summit hosted by investment banker Allen & Go. got under way at the Sun Valley resort.
One of the first sessions focused on how to capitalize on digital media. Twitter became a focal point of the discussion because it has emerged as one of the Internet’s fastest growing services this year.
But Twitter hasn’t attempted to profit from its popularity yet, leaving everyone guessing about how the 3-year-old startup intends to pay its bills after it exhausts its $55 million venture capital.
The participants on the panel moderated by media writer Ken Auletta of The New Yorker predicted Twitter Inc. will face major challenges when the San Francisco company finally tries to generate revenue.
Two of the panel participants, veteran media executive Barry Diller and cable television magnate John Malone, reiterated their skepticism about Twitter’s moneymaking potential in separate interviews.
“I think it’s a great service. I just don’t think it’s a natural advertising medium,” said Diller, chief executive of online conglomerate InterActiveCorp.
Malone, chairman of Liberty Media Corp., also believes Twitter will be hard-pressed to sell advertising on its messaging service without alienating users. Twitter’s best bet, Malone said, probably is to simply get people so addicted that they might eventually pay fees.
Twitter Inc.’s co-founders, Evan Williams and Biz Stone, still haven’t revealed their business model, but have indicated that advertising is low on their priority list.
Williams attended Wednesday’s sessions, but didn’t speak up when other executives expressed doubts about Twitter’s revenue prospects. He declined to be interviewed as he left the morning discussion.
Many media executives running long-established companies are wrestling with their own daunting problems as the Internet lures consumers and advertisers away from them. Few of the executives attending the media summit wanted to talk about that trouble Wednesday.