SUN VALLEY, Idaho — 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 is going to make money.
The recurring doubts about Twitter’s moneymaking potential cropped up again Wednesday as an exclusive media summit hosted by investment banker Allen & Co. got underway at the posh Sun Valley resort.
One of the first sessions focused on how to capitalize on digital media. Twitter quickly became a focal point of the discussion because it is 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 magazine predicted Twitter Inc. will face major challenges when the San Francisco-based company finally tries to generate revenue. Reporters were barred from the session, but Auletta confirmed the tenor of the Twitter talk afterward.
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 to the service that they might eventually pay fees.
Twitter Inc. co-founders Evan Williams and Biz Stone haven’t revealed their business model but have indicated that advertising is low on their priority list. They have suggested they might impose fees on companies interested in mining the data about consumer preferences and peeves that pour into Twitter.
