Recent Twitter outages have caused much consternation. These seem to be symptoms of recent rapid growth. With a platform business like Twitter that does not charge its users, it gets no marginal revenue but incurs marginal costs as its user base grows, which leads to cashflow problems.

Obviously the strategy is to raise revenue from other sources such as advertising or making some other use of Twitter data. The problem is that it’s hard to increase these revenues in direct sync with the user base. Scaling problems become more acute in this type of business model where an additional users brings additional costs immediately, but brings marginal revenue later.

Interestingly, some Twitter users are so upset by the outages that they are organising a ‘charity’ drive to raise money for the company to help it buy servers. Another new revenue model?