What price trivia?

Twitter is a system that asks "what are you doing now", and the result has been not so much a Winer-esque "River of News" but more a "sewer of drivel" as people talk about everything from their impending soy latte choice (with or without vanilla, that is the question) to the incredible lightness of being

However, not for very much longer, perhaps. Nicole Simon (who we follow on Twitter, ironically) has written an article on Twitters attempts to monetise itself. Sez Nicole:

Is Twitter going to set up a credit based system for sending / receiving messages? A screen I saw the other day suggests so. It was from my mobile, so I did not react in time to make a copy, but it basically said to me: "Not enough credits to send message".....

......Twitter is giving me some value and to a certain degree I will be willing to pay money for it, but I doubt they can monetize it as much as for example mobile carriers earn on SMS today. SMS earnings depend on people not caring that they pay something like 20-40 dollar cent per message over here; or they have an unlimited data plan.

I am assuming that Twitter would go with something similar: Credit based for lower output and a flat fee for heavy users. How much is twitter worth to you? 5 dollars per month, 10? Free to use together with a plan from mobile carrier XYZ or as an added benefit package, preparing the users for even more spending on their mobile phone bill?

The interesting question, from a Web Economists's point of view, is how elastic is the price of trivia? If Twitter moved from free to even a tiny price, would the banal witterings of the twits be priced out? What would you Twitter about at standard SMS prices, amd how many times would you do it? I don't receive many SMS messages about the lovely ham sandwich some twerp I don't know halfway across the planet has just eaten, because neither they nor I want to pay money for that sort of information.

Clearly for Twitter therefore, any form of user pricing mechanism will kill a lot of the traffic on it, and probably lead to user defection - after all, we already have SMS etc etc so why pay for another system to do the same thing? The issue therefore would be to find a price point that maximised the price x posts equation, but still returned adquate money to cover costs and make a profit - but is this circle actually squarable?

Which brings us to an Ad model - the Twitter web property has value for Ad display, and that clearly is an option, but monetising the costly bit - mobile transport - could be far harder.

Interesting times then....Jaiku sold itself to Google, but Twitter as yet has minimal revenues, but costs are going up as customers and traffic rise, yet apart from more VC investment its hard to see where the money will come from.................