Twitter may have a business model

Twitter may have Bill Gates as a user but where's its business model?

Chief Operating Officer Dick Costolo sat down with Bloomberg to try to convince a panel in San Fransisco that it has one - beyond flog it and run!

The outfit is thought to be worth a billion dollars. But that's to someone who thinks they could make money out of it. Microsoft has been tossed into the ring as a potential buyer. Or the outfit could launch itself onto the stock market and hope its brand presence brings in the investors. It would.

"We have to catch up to our valuation," Costolo told the Bloombergers. "We've created this global brand. It's one of the fastest - if not the fastest - growing brands in the history of the world. Now we have to go build the business that lives up to that valuation."

Advertising on the site is the most obvious way forward. The firm raised around $150 million in venture capital last year, some of which it splashed out on Mixer Labs for software to help it gather information about users' whereabouts when they tweet.

This may prove useful in providing location-targeted ads. So far, the only money coming in seems to be from distribution deals signed with the likes of Gurgle and Microsoft, allowing their search engines to show tweets. The firm also has the idea of setting up commercial accounts, which may be a goer.

Costolo, who, in a previous life, was the chief executive officer of news feed FeedBurner - bought by Google in 2007 - said Twitter will test any advertising service before running it. Any ads will be unobtrusive and "enhance the platform" he promised. They would have to be. Or they could kill the service stone dead.

Internet fads come and go and despite Bill Gates' rather late arrival on the scene, many Twitterers are beginning to question whether they'd not be better off living a life rather than tweeting it.