“Just so you guys know — I’m switching to micropayments, because [REST OF JOKE CURRENTLY LOCKED. PLEASE INSERT ONE DOLLAR.]” (via @aedison)

Why was I amused?

The implied sentiment is appropriate given the discussion of paywalls for journalism. Heck, even @charlesarthur the technology editor at The Guardian joined in. Rumors and outright statements about charging for blog or news content have been circulating from several media outlets. Rupert Murdoch stated that all of his newspaper properties would start charging for access to their websites. The Financial Times is leaning in the same direction.

When you think about the joke, it’s silly that people would charge for news or news blogs, but potentially even sillier to charge for microblogs and tweets.

Why would I be offended?

The current discussion around micropayments is yet another round in a series of  micropayments debates and discussions. This time it’s literally micropayments 3.0, and it is a little offensive to see the same old arguments and jokes about micropayment pros and cons popping up without any reference to the previous analysis and commentary.

Not only did my colleagues and I debate and discuss those same issues for micropayments 2.0, but we had to revisit, clarify, and rehash the debates that arose during the micropayments 1.0.  Each time there were academics that developed equations and user models about the mental transaction costs, usability issues, massive transaction volume requirements, reader commitment development, engagement development, pre-pay vs. post-pay issues, banked vs. unbanked considerations, and more. All of those are valid issues and worthy of debate; however at the end of the day, the real proof is in the pudding. Micropayments didn’t work for many, but did micropayments work for anyone?

The BitPass team and I can definitely say “Yes”: micropayments work for the right type of company and content. We had customers in many content verticals and analyzed the buying patterns and demographics of users and the selling and conversion patters of merchants. The simplest answer to what sold was exclusive content from trusted merchants.  When there was no exclusivity, users went elsewhere to find the content for free. When the users trusted a merchant and knew ahead of time the quality of the content, they were willing to pay for it.

The butt of the joke

Would I pay for the answer from any “joe” on Twitter? No, but I might pay to get @aedison’s punch line since her content is generally good and I trust her to deliver some quality. This leads me to the other popular category  at BitPass: entertainment. People tend to pay for entertainment if it’s exclusive, if they respected the content creator, and if they thought the content creator would benefit from their payment.

All joking aside, I hope that the media companies keep in mind their products’ appeal and audience while they consider whether micropayments are feasible within their market.

Way back in 1999 when working for Communities.com, we had virtual worlds for avatar chat, both in 2D and 3D with 3D audio. These products, The Palace and Onlive! had passionate users that not only created props (wearable/usable objects), avatars + their clothes, but also rooms & worlds. There was no way to pay for such things back then, but human innovation was not to be stopped. It turned out that users turned to eBay to list and sell in-world items, and the commerce mechanism of choice was PayPal.

Money was being made even then, and with virtual worlds sprouting up in niches to serve anyone who wants one, it’s another wild west ripe with revenue potential. We had top notch developers and web gurus at Communities.com, and our data showed some pretty obsessive dress-up and self-branding behavior that continues to be mimicked in the MySpace and physical worlds. Likewise, my experience in identity development and communities over the past 10 years suggests that this behavior should be expected and will not stop. Based on these few tidbits, the question isn’t if money will be made, but how much and by whom.

In the announcement, Offerpal explains they have been able to offer to publishers around $75 per 1,000 daily active users they bring to the application (see link above) and expect similar results with IMVU.  I calculate that if IMVU’s five million uniques per month came ONLY once each month, the revenue would be $375,000 to IMVU, assuming Offerpal’s numbers turn out. If Offerpal takes 20% it would yield them $75,000 a month.

So is the caveat that the world owner, IMVU, makes the big bucks? Partially. Another caveat I see is patent trolls waiting to leap into this market. At Communities.com, we had five patents covering secure distributed objects; necessary evils to protect technical innovation.  But this mean that secure distributed objects could be a true scarcity in the communities economies – a one of a kind signed poster from Taylor Swift could literally be one of a kind, with a certificate of authenticity. So as the monetization of virtual worlds moves forward, I’m waiting for those patents and current patent owners, to re-emerge and extract their take from the virtual world economy.

Who’s the winner here? TweetBucks, definitely. Let’s do some simple math with the following simplified assumptions.

• 1 million users
• Average affiliate product price $20
• Affiliate fee 10%
• 1 Unit sales per affiliate per month

Under these simplistic numbers, the cash flow would look like:

• $20M total sales/month
• $2 M affiliate revenue/month

Applying TweetBuck’s 30%, yields Tweetbucks $600,000/month.

I’m hoping someone who has used the service will comment and include more details from a user perspective. At first glance it looks like a great model for TweetBucks. That 30% comes from TweetBucks being a “super affiliate” where they sign-on as affiliates for all the products and issue revenue checks based on everyone using their affiliate links.

Why wouldn’t you instead sign up as an affiliate and get your 100%? Well that’s the beauty of their system. They do the work for you – signing up for all the affiliate programs, providing the link shortener/converter, and you don’t need a website or need to update your HTML or optimize your affiliate products. It’s a decent trade off if you don’t already have a system to use your affiliate links on Twitter.

So if you want to try affiliate marketing and have a user base, TweetBucks may be an easy way to get started with some potential for supplemental income.

With TweetBucks, Twitter again shows that it has potential for business, but like all business uses of Twitter, it has serious potential to generate spam and annoy the users that depend on it for relevant and timely information. It will be curious to see if TweetBucks can provide a real value to businesses through the affiliate channel or if it will becomes an automated weapon of Twitter spam and a bane to normal Twitter users.

Numbers like that don’t get overlooked by the business world. Already, companies are finding creative ways to integrate Twitter into their marketing program. A recent BusinessWeek article suggests some business marketers are trolling Twitter for leads. A business owner said she “keeps tabs on her competitors.”

Other business executives are following their clients on Twitter. Chip Lambert, owner of a Phoenix business consultancy, told BusinessWeek:

“You can look at conversations and reposition yourself, your products, and your services in a way that appeals to the market you are reaching out to.”

Twitter wasn’t necessarily intended for business use. Services such as LinkedIn, a network designed to help people establish business contacts, are probably more appropriate. (LinkedIn has over 35 million registered users.) But Twitter might be an Internet phenomenon that naturally crosses over from the consumer to business user.

Take the case of award-winning photojournalist Jim MacMillan. He left his job at a newspaper and established an online business, joining some forty social networks, including Twitter, according to a report in Knowledge@Wharton. “Today, he has close to 14,000 followers reading his posts on Twitter – a number on par with some celebrities. … He believes he reaches a larger and more engaged audience” than when he worked for the newspaper.

Twittering might also be a legitimate way to re-establish yourself if you are laid off or leave a job to go solo. But as some Wharton professors point out, social networking is not without risks to your personal brand. Professor Andrea M. Matwyshyn says:

“Your professional branching-out can be commingling with your personal friends’ accounts, and you are exposing all of them if somebody decides to give away your information or post something imprudent.”

Professor Eric Bradlow thinks “you need to seed the right people, to develop a word-of-mouth army” to be successful.

So go ahead and use Twitter for business. Just be sure whatever you tweet doesn’t come back to haunt you.

While the acquisition may seem to be an odd move since the companies are processing around $80 million in combined transactions, the truth is the market is much bigger than the two of them combined.

To understand why this is a smart move, consider several related market news items:

• iTunes apps store records 1 billionth download
• Habbo records $74 million in real revenues
• Chinese Internet giant, Tencent makes nearly $800 million on virtual goods (see Internet value added services line)
• EA’s free video games pull in > $1.6 million a month in microtransactions

With that much money moving around, how do micropayment startups like PlaySpan and Spare Change compete? By pooling interest and leveraging each other’s strengths.

So money can be made, no, is being made in social networks, games, online, and mobile – all places where PlaySpan and Spare Change do have a shot. And now, with their resources combined, they have a better shot at competing.

Having virtual goods does not equal micropayments, nor does having one, the other, or both guarantee any success. The question is can PlaySpan continue to capitalize on people’s interests in virtual goods/games? The key is, as with each of success cases above, the virtual good, game or service provided must be one people are willing to pay for.  This is how companies like PlaySpan can cash in by facilitating the transactions for the virtual good, game or service and capitalize on this growing market.

The basic idea is both brilliant and evil at the same time. On Swoopo the microbid price  increases in increments of $0.15 meaning an item can be bid up from $1 to $1.15 to $1.30 to $1.45, etc; each bid increase incurs a micropayment of $0.75. When an item is bid up the minimum microbid amount, for each $1 in bids the company running the auction has made over six times $0.75, or more than $4.50. If an item increases $10 in price this way the company makes $50. So if that Nintendo DS you want increases in price from $1 to $31 in increments of $0.15, the company has taken in $150.

Think about that for a second. It would hurt to have bid 10 times in that auction, pay the $7.50 in bidding fees, and still lose.

Think about that again – would you stop bidding and lose your investment, or would you keep bidding to try to win that one item? Pretty evil.

That’s also where the brilliance is. As soon as someone bids they’ve lost money unless they win the auction. And by win, I mean they’ve probably paid another $15 to $30 to win the right to buy the item for the final price. Since there’s only one winner, it could easily feed into spending more in another attempt to win an auction. To make it more attractive, think about how it looks to drive by visitors – Wiis won for $50, DS won for $30, PS3s won for $100. There’s potential for huge profit margin on bigger ticket items. Almost sounds like printing money.

Is this a smart way to spend your money bargain hunting? Is it really entertainment, as the spokespeople claim in the Venturebeat article? I’ll avoid Swoopo, but I’m compelled to watch how they are able to tap into the basic human need to win, not lose money, and get a good bargain.

As brand managers and online marketers, a quick way to proliferate brand awareness is to create a way for people to socialize with and for your business. I like to think of these embeddable widgets like takeout food or a way for people to grab your valuable content and share it with their friends and online communities. The portable content that you create, be it a collection of your latest blog posts, a daily tip or an aggregation of news clips, literally gives people a portable piece of your brand that they can then socialize with.

Creating these widgets is the easy part. With an RSS feed address and a few graphics culled from my new WordPress blog, GroceryLove.com, I recently produced a “Daily Food Tip” sprout. Visitors to the site can grab this widget and embed it on their own blog or post it to their own social networking profile. The “Daily Food Tip” widget shares daily food news and daily food tips for grocery store connoisseurs. As a new site owner on a tight budget, this was a quick and easy way to build value-rich portable content for my budding online community.

Sprout is the quick and easy way for individuals and businesses to create, publish, and manage interactive rich media widgets. Below is an example of Sprout as used in the GroceryLove blog.

Sprout provides but one way to build, publish, and manage widgets and other rich media web content. I fell in love with Sprout’s platform but they are by no means the only game in town. Even doing a quick search on Google with the search term “creating widgets” will yield hundreds of results. The trick is to generate a widget that gets people socializing with a piece of your brand and the portability of sociable widgets is an inexpensive and time-saving solution.

So what are you doing? Get out there and start making some takeout food!

Brian Solis of PR 2.0 recently introduced an exciting model for optimizing the rampant availability for online connectivity called MicroPR, a PR resource for journalists, bloggers, and analysts on Twitter. The passion behind the project conspires to create new communities and communication channels that will ultimately change the information ecosystem.

Below is an example of the MicroPR information flow that uses Twitter, (a free social networking and micro-blogging service allowing users to send and read other users’ updates,) to share PR questions, resources, news, and feedback with all those interested in connecting with the PR community:

The MicroPR project is an exciting project to participate in and as with any innovative application of social tools, I believe it’s a powerful model for new media marketing strategists. There’s no reason why the same equation can’t be applied to your business or brand.

Community + Business + Twitter = Brand Ambassadors

I liken the MicroPR profile, as a basecamp for all the people and professionals associated with your business; a place to mingle, and a place to share and swap ideas, resources, news, feedback, and questions. The key is to give people a reason to mingle.

Think of exploiting a unique aspect of your brand and something that provokes either conversation or encourages people to get online and grab it: offer product specials, design an online treasure hunt, create a multi-media contest using Flickr or YouTube, or give way insider tips. Think of your basecamp as platform for listening and response, a platform to get valuable and instant feedback, and not a one-way broadcast channel. Think mingle!

The MicroPR project is but one inspiration in a seemingly limitless list of online opportunities for community building, branding, and marketing. Twitter now boasts over six million registered users and continues to grow exponentially. Twitter’s phenomenal growth and ability to keep us all hyper-connected is nothing short of awesome but also proves people’s desire to stay connected. It’s a huge tip for new media marketers and should encourage your business or brand to find their own unique way to get in on the action.

Now that the song is stuck in both our heads, I will commence with the skinny on how-to use Twitter directories to help build your professional network. Nowadays, Twitter is the “it” site for microsharing. Businesses are utilizing the popular social networking platform to improve internal communications, to bolster corporate relationships, for professional development, to mentor their community, to increase intelligence, and to create opportunities for collaborations, real-time think tanks and increase their productivity.

Social based flow communities such as Twitter are pioneering the new wave of business collaboration, networking and community building. It would behoove anyone to catch the wave now and ride on into this exciting new evolution of microsharing. Whether you are a major corporation or a self-employed freelancer, something to consider is ‘intelligent befriending.” A great resource for finding like-minded people to link up with is via Twitter directories. These directories allow you to either find friends in your niche area of interest or to list your own twitter profile so you can be found.

Twitter directories work as wonderful starting place to gather up your online tribe and to advertise your wares online. A prevalent problem with sharing all of your awesome content online is the inability to get your voice heard among al of the senseless clamoring. But there are tools and platforms available for free which enable you to find and be found! A few directories worth checking out are Just Tweet It, Twello, and TwitDir:

Just Tweet It: A user directory for Twitter, organized by genres to allow users to find other Twitter users to connect with. JustTweetIt allows users to add their name, an avatar and a small bio in multiple categories.

Twello: A Twitter search engine, a search directory of people by area of expertise, professional or other attributes listed in personal profiles on Twitter. There is a ton of information on Twello and well worthy of spending a few hours seeking out Twitter peeps and listing up.

TwitDir: A Twitter directory that allows users to type in keywords or phrases and search within Twitter usernames, descriptions, locations and everywhere. While you are on TwitDir, check out their lists: Top 100 followed, Top 100 Updates, Top 100 Favorites, and Top 100 Followers. They are quite amusing.

Lastly, if you’re looking to friend up a creative writer self-professed social media junkie, add me as a friend. I promise I won’t bite.