Twitter CEO Dick Costolo discusses the company's business model, the departure of its co-founders, and its future in advertising.
Almost from the moment the first 140 characters were tweeted, people have been asking Twitter how it will make money. The initial answer has been “advertising,” but company CEO Dick Costolo today suggested that “commerce” might be the next leg of Twitter’s revenue stool.
During a keynote interview at Fortune BrainstormTech in Aspen, Costolo was pressed about his company’s business model. After discussing its various advertising options — including its plans to eventually offer self-serve ads — he mentioned how conference organizers and sports teams had used Twitter to find buyers for unsold inventory. For example, the San Diego Chargers were able to quickly sell around 1,000 tickets to a game that otherwise would have been blacked out on local television. Twitter itself didn’t make any money on those transactions, but may look to do so in the future.
“There’s a commerce opportunity there for us to take advantage of if we want,” Costolo said. “How can we remove friction from the process?”
He declined to explain exactly how Twitter might remove that friction — or even that a plan was in place — but did suggest that the Chargers could have sold their tickets even more efficiently were buyers not forced to visit an entirely different website to make their purchase.
Costolo added that advertising will continue to be the company’s dominant revenue component, including sponsored tweets and sponsored trending topics. He declined repeated opportunities to disclose how much advertisers currently spend on Twitter, or any other company financial information.
Costolo joined Twitter as chief operating officer in late 2009, and was promoted to CEO 13 months later. Since then, two of the company’s co-founders have departed and the third has returned to lead product. Costolo was asked about the management tumult, which was partially described in a recent Fortune cover story. He suggested that the focus on the co-founders has been misplaced, and that the current management team has been working together well for months.
“Jack and I, specifically, work very well together,” Costolo said. “He speaks with the fluency of the inventor of the product.”