Photos Are Great, But Will They Help Twitter Make Money?

According to a number of reports, Twitter is close to adding a photo-sharing feature similar to that provided by third-party services such as Twitpic and Yfrog. The addition seems like a natural for the information-sharing network — so obvious, in fact, that many have wondered why Twitter didn’t add the ability a long time ago. But while the new feature will almost certainly spark renewed concerns about Twitter bulldozing its third-party ecosystem, the big question is whether image-sharing can help the company figure out how to make money.
Ever since Twitter investor Fred Wilson of Union Square Ventures made his infamous comments about how developers shouldn’t just “fill holes” in the Twitter feature list, image-sharing has seemed like a natural service for the network to add. Twitpic was one of the first external Twitter services that really took off, with millions of people — including the guy who took a shot of the plane landing in the Hudson river — using it to share news-worthy photos. But Twitter has so far avoided adding this feature, preferring to add a URL shortener and spend its money buying clients such as Tweetdeck instead.
While adding image features seemed obvious from the beginning, Twitter likely avoided it for some time because of the strain terabytes worth of photos would have added to its network infrastructure, which was not very healthy until recently. Now that those issues seem to have been solved — with the network staying up even during major events such as the British royal wedding — it appears adding such features is on the list of things to do.
Twitter may have inadvertently chosen the perfect time to launch such a service, judging by some of the backlash Twitpic has been enduring recently. Twitpic has been widely criticized for changes to its terms of service that give it the right to license user photos to an entertainment news service, without sharing any of that revenue with the original owner. A number of users have said they plan to boycott Twitpic as a result, which gives Twitter a large window of opportunity. That and easy integration with Twitter’s various software clients should give it a pretty big runway.

But while sharing information such as photos may seem like a natural extension of the company’s mandate as a real-time information network, will it help to monetize that network? Twitter is under increasing pressure to boost its revenue and profitability after raising $200 million worth of venture financing — which values the company at almost $4 billion. Advertising via services such as Promoted Tweets and Promoted Trends appears to be generating some income, but it’s not clear how much or whether it’s growing rapidly enough to justify those massive valuation numbers.
The benefits of adding image-sharing are two-fold. On one hand, the popularity of Twitpic and other image services shows many users want this feature, and therefore, it’s likely to be a powerful tool in terms of increasing user “stickiness,” which my colleague Colleen wrote about recently. Twitter has hundreds of millions of registered users, but the number of heavy users is still relatively small according to some estimates. And as Om has noted, Instagram has shown how popular simple photo sharing on a mobile device can become. If Twitter can emulate that kind of behavior, it could really stand to benefit.
The second aspect of image sharing is that it could provide more real estate within the Twitter homepage for advertising. Ever since the service redesigned its website to add a “details pane” with embedded media such as photos, videos and music links to iTunes (s aapl), that pane has seemed like an ideal spot for traditional branded advertising. Those kind of ads are something Twitter has not really engaged in so far, but it seems like a fairly natural extension for a company that has become a real-time media network.
But here’s a hint for Twitter: Take a hint from Twitpic and don’t claim ownership or licensing rights over people’s photos. They don’t seem to like that too much.
Post and thumbnail photos courtesy of Flickr user Lali Masriera