Lesson From Google: Corp Accounts May Not Be Twitter's Golden Egg

History Shows Patience Can Pay Off in a Larger Opportunity

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Peter Hershberg, Managing Partner, Reprise Media
Peter Hershberg, Managing Partner, Reprise Media
Often when an online start-up's revenue model is unclear to some or most people, the immediate assumption is that the answer must be corporate licenses or professional accounts. This has been the discussion around Twitter for some time and now I've been reading the speculation about Bit.ly as well.

This came into focus for me recently when I re-read a Business Week article from 2000 about Google. I was at Ask.com at the time and, like Google, we had two sides of the business, corporate licenses and a consumer site. The belief (and reality) was that Wall Street valued B-to-B revenue potential more highly than consumer revenue potential, so that side of the company received the bulk of the resources. Ask went so far as to position the consumer site as a showcase for the corporate technology. Some execs simply didn't think there would ever be a business there because the rev opportunity wasn't obvious. (Eventually Ask sold the B-to-B component for 3 or 4 million bucks, while its consumer business went for billions.)

When reading the Business Week article, it's obvious that everyone -- including Sergey Brin -- thought that Google's opportunity was in corporate search. But management luckily proceeded with developing AdWords and the rest is history.

This isn't to say that corporate deals can't be lucrative, but companies ought not to limit themselves to bigger opportunities, if recent history holds true. It's like 2000 all over again and we're going to look back in 10 years and laugh at how people viewed Twitter and others -- and laugh at how they were blind to the bigger picture.

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Peter Hershberg is Managing Partner of Reprise Media, you can follow him on Twitter at @hershberg.

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