Should Twitter be Profitable?

Bloomberg reported Twitter will finally turn a profit. The trendy mass-text-messaging service will earn about $25 million from search deals with Google (GOOG) and Microsoft (MSFT).

First, congrats to all the investors who have watched their money burn like bras in the ’60s. Hopefully you all start making a return.

However, I am not sold on the value of “micro-search” or whatever they are calling the ability to search the random thoughts of the world. I think there’s a ton of value in the digestion period between real-time twits and the efforts of bloggers or media outlets filtering an article for us.

Case in point: all the Twitter celebrity death hoaxes. If you searched Twitter regarding the death of Britney Spears on the day of the hoax, you would be misinformed. This is just one example of how the Twitter game of telephone can spread information which is majorly inaccurate or patently false.

Obviously, the same risk applies to everything on the web. But there is something more spectacularly powerful about Twitter’s ability to shape-shift information and spread confusion. Unless Google and Microsoft have an algorithm to deal with this issue, I hardly see the value of paying big bucks to search Tweets ahead of websites (something which is now annoying the hell out of me on Google). If I search for Alabama Crimson Tide, I am interested in getting info from ESPN or the University of Alabama, not @rolltide saying, “We’re gonna rip those Horns!”

Well, this is only the first inning of micro-search. Twitter has an incredibly high abandonment rate (60%), so we’ll see if another company turns Twitter into Friendster. I have a feeling the 140-character limitation as well as other shortcomings will allow new bright entrepreneurs to get in the game. Only time will tell if Google and Microsoft are ahead of the curve, or simply expressing their fears of being left behind.

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