Mathew Ingram passes on the fantasy thinking of a lot of the people around Twitter:

Twitter investor Fred Wilson seems to be getting more and more exasperated with the question about the company’s business model, but as my friend Mark Evans notes, it’s a question that has become a lot more pertinent than it was even a few months ago. Another investor, Bijan Sabet of Spark Capital, says Twitter will introduce a business model of some kind next year, and Henry Blodget at Silicon Alley Insider believes that the company could eventually be worth $1-billion once it figures out how to translate a devoted user base into actually dollars and cents.

Here's the thing: how many people even bother with the Twitter home page? Not many, I'd guess (which is why Jason Calacanis' silly notion of a leaderboard is, well, silly). They have an open API, and most people use third party apps to get at their tweets. Sure, they could start slapping ads into that stream - Twitterific slides its own ads into the stream now.

But how valuable are ads thrown out that way? Unlike search ads, they aren't targeted (and I don't really see any good way to target them). IMHO, the ugly reality is that there is no ad related model for Twitter. Either there's a direct micro-pay model that the user base won't rebel against, or there's no model at all.

Technorati Tags: twitter, business model