ME, GRIMLOCK, SAY FUTURE OF SOCIAL STREAM NOT FULL OF ADS. NO ONE WANT, ONLY WORK NOW BECAUSE OTHER WAYS TO MONETIZE TOO HARD. APP.NET, APP STORE, KICKSTARTER, DROPBOX, ALL PROVE PAY OR SUBSCRIBE VIABLE MODEL.

WHICH ONE FUTURE? MORE ADS, OR MORE PAY?

I think (finally) that we're about to go into a hybrid model. Freemium, if you will.

Social advertising sucks, from a user experience. Twitter seems okay, but the only folks that I feel have gotten ads right are (a small subset of) content providers. Penny Arcade just ran a Kickstarter to move into a paid model away from advertising - and it half-worked (kickstarter.com). They raised half of what they wanted and twice what they needed. But one of the top responses they got was "but we like your ads, don't take them away".

If you can make advertising a genuine addition to your value proposition, then ads are the right way to go. Otherwise, the model of asking for $2-5 sure looks pretty good.

:/ no way to delete ajax-y double posts, huh?

ME, GRIMLOCK, AGREE.

IF ADS WANTED, THEN GOOD.

NUMBER OF PLACES ADS WANTED IS SMALL. IF NOT BUILDING IN ONE OF THEM, NEED DIFFERENT SOLUTION.

I don't know about the number of ads wanted bit. I would offer that (as a user) the number of ads wanted is small - but users are notoriously bad at understanding what they want.

I think what's really going on is that doing ads right is REALLY hard. And the standard mode of thinking is get eyeballs, then monetize them with ads. That model is great for building a product without thinking too much about monetization (which can be a good thing) - but it leaves monetization out, as a tacked on thing. Just like "adding social" onto a service as an afterthought makes for a crappy experience, the same may be true here.

Both free (ad supported) and paid solutions have a place in the future of social, but free will always be on a larger scale. Paid solutions create a walled garden, this limits innovation and restricts creativity. It also limits how many people can respond and react to anything. By having an open forum you encourage new ideas, concepts and participation. While there maybe more noise in an open forum, it is always going to be a more creative and colourful process.

But do you think that Twitter could be (or have been) successful with a paid model that only impacts premium users? Have a system wherein some users pay, but all can be part of the conversation?

Sounds like it would be a class based society, not one where everyone would be equal... they tend not to work out so well. I'm sure some people will pay to have no ads, but how much? 2/3/4/5$ per month/year? Could a subscription model replace the potential income from ads? I'm pretty sure that advertising generates more revenue than a subscription model. As companies drive to be more and more profitable (millions no longer do, it has to be billions), advertising provides a much stronger revenue possibility. There are other alternatives or hybrid models that could be applied, but they are difficult to implement and get right.

Take Klout for example. They are trying monetize other peoples skills and talents (poorly at the moment) using gamification and token rewards. This is an iteration of older forum based title awards for x posts/votes etc... The problem with this model, is that it takes a long time to generate revenue and is quite fickle and can be easily gamed.

The real question: how long will ad-based systems last when the advertisers realize they're not seeing any returns from the money they've spent? This is a problem hitting FB right now; and whereas ads have worked for certain sites that cater to a specific audience, we haven't seen any non-anecdotal evidence that ads placed on general purpose sites drive users to clickthrough those ads.

(The way Twitter does ads is less irritating, but also much more easily ignored.)

We'd agree, though, that a walled-garden approach is growth-limited by its nature; some sort of "premium" level should drive the walled portion, while a basic level allows others to participate enough to be interested in going to the premium level (re: Soundcloud).

One possible alternative for forum/article/content based sites would be to allow a certain level of access per month, a carrot if you will. Maybe I as a free user can read x articles or make y comments, to get me hooked and interested... but once i have reached my limit i must pay to take part.

Personally I would it annoying, but if the content and interaction was worth it i'd probably pay.

Returns are a funny thing. I think that companies that care about their CPA immediately see whether they're making money on an ad campaign, and if they're not, they cut it out. But there's a huge subset of firms that advertise without the hope of seeing conversion numbers, because they don't generally convert online (think Coke). Even someone like JetBlue may struggle to understand conversions from their Twitter followers - if they're not following a deal link, but direct nav to the site, that's harder to track (still possible, though imperfect, with cookies).

Because of this, I'm unsure as to what the advertising shift will be on Facebook and other social media. I agree with you in spirit, but companies still pay for TV spots, right?

MONEY SPENT ON ADS BECAUSE NO ONE KNOW WHERE ELSE TO SPEND IT.

BUT THAT CHANGING. SEE ARTICLE businessinsider.com

ON INTERNET, USERS STOP CLICKING ADS, GO STRAIGHT TO AMAZON WHEN WANT SOMETHING.

THAT NOT GOOD FOR FUTURE OF ADS.

BY WAY, THINGS ABOUT TO GET MORE INTERESTING, ME JUST LET IN BUNCH MORE HUMANS.

I don't see this as an either-or problem. I believe many brands would gladly pay simply for the privilege of being a paid rather than free customer, while the vast majority of individuals can enjoy the network free.

Twitter offers "premium" analytics and analysis features for companies that pay for promoted tweets, however I believe many would pay simply for those features alone. Or for social media "services" directly from the experts.

Direct advertisement is unnecessary and may even be counter productive. Popular networks are, by nature, valuable both as a marketing channel and for market research and sentiment analysis. I believe many brands would gladly pay serious money just for participation, premium features and expert support.

NO LIMIT DISCUSSION JUST TO TWITTER. INCLUDE ALL SOCIAL NETWORKS.

WHAT IF EVERY 3RD EMAIL TURN INTO AD? YOU STILL USE EMAIL?

OR THAT ALREADY HAPPEN WITH SPAM? ME THINK MAYBE THAT BAD EXAMPLE. OR BEST EXAMPLE OF ALL.

From my point of view, all ads are spam. I honestly don't think I have ever clicked on one, let a lone purchased something because of one. They are the shotgun of the gun world. You're bound to hit something, in the general area you aimed it. For them to be better, the advertisers need to know more about me. And in general, most people like me want their privacy.

Finding that balance is tricky.

I hope there will be innovation around this, beyond paid or As. Is the published stream a moveable container, a format or something else more powerful?

Ads suck for all the reasons already mentioned. Also, ad blocking is so easy I've expected it to go mainstream for some years. Chris is right, the service can very well be profitable with just limited amount of paying customers. You may be able to put a pay wall around some types of content but especially for social networks you need to have the free option. I can't see eg. App.net ever powering the next Arab spring with their current plan, but that's exactly something it has to be able to potentially do to be meaningful. plus.google.com

The problem with all ad-based "free" services - whether it's old media or new media: users immediately gravitate to any method to shut off ads when it is presented to them.

In old media, they know this well - and are scared to hell of it. For example, look at DishTV's Hopper AdEraser service: it's nothing more than a DVR with the ability to receive logs that identify commercial pod locations a few hours after an initial broadcast - and then it automates the DVR to skip over those locations.

Within a day of its announcement, the broadcast networks were suing Dish (on copyright grounds!) and local stations were banning DishTV Hopper spots.

Apply that to ad-based social networks. The ad-based future isn't rosy.

lostremote.com

No social network is going to work without free entry. Until there is a critical mass for a given user it's not worth paying for. But the freemium model using adds for revenue from non-paying users creates too much of a conflict of interest to work long term.

For advertising based services where users are product rather than customers there is always too much pressure to compromise the users to benefit the advertisers, see Facebook private updates.

There won't be a high enough proportion of paying users to mitigate this in a hybrid model. So long term I suspect social media will have a model more like Dropbox, limited free, still no adds, pay for users that really get the benefit. With the paying users subsiding the rest.

I think historically, people prefer ad-supported free services. Television, Facebook, MySpace, etc.

While Dropbox and Flickr are decent examples, I'd be interested to see an actual percentage of paying to non-paying users.

Tumblr has has users saying they'd love a paid model, but when presented with paid features (post highlighting, premium themes, pinned posts), those willing to step up and pay seemingly vanish.

Ed Costello - Users as product. That's brilliant

Alex Stone - I think the difference is the amount of trust vested in the service. With traditional media the scope for prioritising advertisers over user was really limited to the news. No harm is really done by product placements. News tended to be separated either by law or practice to limit bias.

Where as with new media it's the users providing the content so there is a lot of information so lot of scope for abusing the trust users place on these services. When you're not the customer you don't really have much comeback. Where as when the service is funded by users the interest is in keeping the users happy, not just happy enough that they don't leave. Which is all that's required if you are advertising funded.

BREAK DOWN OPTIONS:

INITIAL FREE VS. INITIAL PAID: FREE ALWAYS WIN

PAY WITH ADS VS. PAY WITH PAID: ADS ARE DOWNWARD SPIRAL

OPTIMAL SOLUTION OBVIOUS: MOST SOCIAL NETWORKS WILL TRY ADS, EVENTUALLY DROWN UNDER WEIGHT OF SELL OUT USERS FOR PROFIT.

ONES THAT SURVIVE WILL USE NO ADS, FREEMIUM MODEL.

WHY THIS NOT MORE COMMON? INERTIA? FEAR? DEVELOPERS TOO LAZY TO ADOPTER HARDER APPROACH?

I think it's fear of failure. You drop so much time, passion, and energy in to a product. Putting up a potential, onboard-stopping, barrier like asking for a credit card is such a large risk.

Imagine if Twitter asked for money upfront. Would it be the behemoth it was today?

ANSWER IS MAKE OBVIOUS WHY PREMIUM VERSION WORTH PAY FOR.

How do you do that with a society that is used to great products at no cost?

The other factors that's been mentioned by others but is worth remembering is that often the revenue stream is an after thought and adding advertising is easy. Bubble 2.0.

Also many services seek to charge advanced or power users. E. G. Twitter promoted tweets. For the model to work you need to charge the majority, those that benefit from the service, free only just enough to get people hooked. Dropbox being a great example.

In the social space this may mean slight throttling of free users or limiting notifications that are really wanted for regular users.

I really don't think Dropbox is a great example of someone doing this right.

No one I know pays for Dropbox. I don't pay for Dropbox. I think distributing or storing large files is more edge case than you think.

Can we think up new models to sustain online social media services?

Agreed with much of what is said here, glad the conversation may move forward.

Part of the issue may be with how quickly we dismiss models based on past or current failures. The models with which we’re stuck seem far from ideal, but they’re familiar.

One path toward a solution might be to separate services from the method by which they’re sustained. It’s a bit like separating editorial and advertising, in traditional media. Or the institutional support given to doctors and teachers. We may find deep issues with big institutions and with intermediaries, but it doesn’t mean we can’t think of their effects.

One of which is that exchanges may be “generalized”. Unlike communism, free-market, or bartering, generalized exchange allows for services (or goods) to carry an imprecise value. It may sound strange from a mainstream perspective, but it’s actually very common. What is exchanged between parents and their children, for instance, is extremely valuable but rarely measured. Of course, in an industrial society, money is needed to raise kids. But parents rarely perceive this money as a debt their children should pay back. A fictional exception is found in Alberto Express: imdb.com
“A young Italian, living in Paris with his French wife, is about to become a father. Before the baby is born, Alberto must repay his father for every expense from his own birth until he left home.”

Much of this is what we describe as a “gift economy”, in cultural anthropology. Some non-anthropologists have come to use the same notion, including in the context of online social media services:
billionswithzeroknowledge.com

Not that the gift economy is a model to follow. But there might be a nugget of insight in separating the value we assign to services from the way we sustain them.

For me this parody website summed up everything I wanted to say about app.net: ihave50dollars.com

Alex Stone - my company pays for Dropbox. It could be that their major use case is enterprise. I don't have anything to back that up.

FG - in my experience, it's not often the devs that are unwilling/too lazy to take on a new approach; they're somewhat less exposed to the downside risk. Also, it's often not devs that set the monetization model.

Alexandre - do you have an example of how a gift economy can work? Or an alternate model that we haven't considered? I feel like it's difficult to have a economy without express measurements, at least when businesses come into play.

@Kerim: Agreed on @IHave50dollars. It’s funny, respectful, critical, and insightful.

@Rob my company uses Dropbox enterprise, too. But, enterprises without their own internal file network are an edge case, I feel.

I actually think Spotify does the freemium thing wonderfully. Everyone I know pays for Spotify, to get the mobile client. Maybe the trick is to make the major appealing feature a premium feature.

I feel like we should have Branch'd this whole "what works and what doesn't" into its own conversation/branch.

@Kerim - thanks for @IHave50Dollars. Best parody we've seen in a while.

We have to agree with the giant robot dino (not because of his giant shiny teeth, either): the true answer is to make it obvious why the Premium is worth it - and theoretically, you'd really have to present one hell of a Premium to do that, as well as create a free version that will make people want to engage immediately.

The whole advertising-based model of people-as-product has already grown long in the tooth, on the verge of becoming last week's fad. FB is simply AOL 12 years ago - except it has ads.

It's time to develop future models that engage without diminishing the user to a demographic. Each user is an individual, deserving of respect as such. Do That = Win.

FORMULA:

NUMBER OF PAID USERS X PRICE > COST OF FREE USERS

EX 1: FEW PAY LOTS, MARKETING COMPANIES PAY $50K/YEAR EACH FOR ACCESS STREAM/DEMOGRAPHIC DATA

EX 2: SOME PAY SOME, PRO VERSION USEFUL TO POWER USERS

EX 3: LOTS PAY LITTLE, MAIN FUNCTION INSIDE PRO VERSION, FREE JUST TEASER/FOR CASUAL USER

Personally I think both EX 1 and EX 2 seem to introduce the least isolation on the network and I believe could and should work well without resorting to banal advertising. They also require the network to figure out how build real value to businesses and "power users" (e.g. real sentiment analysis). EX 3 becomes too exclusionary.

I mean I do think for some networks there are reasons to be exclusive, but being exclusive on the basis of being paid will not create a desirable effect.

Also I wouldn't discount the possibility of selling the services of a team of insider "experts". Tons of money goes into social media experts right now to leverage Twitter, Facebook, etc. Wouldn't companies would find potential value in that expertise coming directly from those companies?

The issue with EX2 and "experts" is that at the end of the day the focus always goes to where the money is. If the primary revenue comes from "social media experts" then the service becomes warped to their needs which prevents it being useful to the people those experts are trying to reach.

EX1 means that the majority of the users pay and become the focus of the business. It doesn't need to be crippled. Just hold back some features that most regular users will want. Spotify is a good example of this.

Ads are in a way democratic because they allow everyone to use the service. The community benefits, too,. because without the people using social media for free it would be less interesting to the others. Launching a paid only service is almost impossible; you can get away without free access only when you already have a solid customer base.

Perhaps for paying users you can remove the ads. And if you have no ads then you need some other way to extract premium fees from some users. LinkedIn does this quite well. You can get a very useful service without paying but the customers who pay get a distinct advantage.

@alexandre wrote: "One path toward a solution might be to separate services from the method by which they’re sustained."

This fits with my idea which is to have social networks be more like utility companies. I see something like app.net which makes its revenue directly from developers who then are given free range how they want to pay for their pipeline. There could then be competing services built on the same core network. One could be ad based while another could be pay-to-play - but everyone could make use of the same network so nobody would be shut out. (Of course that assumes that enough developers would choose ad-supported accounts as a model...)

The model that Fake Grimlock mentins is similar to such services as DropBox
"EX 3: LOTS PAY LITTLE, MAIN FUNCTION INSIDE PRO VERSION, FREE JUST TEASER/FOR CASUAL USER"
I think there is opportunity for social media to generate revenue with this model

@Kerim Even among utilities, several models coexist. Some charge by precise usage, others charge in bulk, and some get other funding sources.

A reason utilities are so interesting is the sense of ownership some communities may have. Regardless of private or public ownership. Regardless of competition. The point is: utilities are invaluable to communities.

The network effect is part of it. Online social media are worth nothing if people have no connection to one another. But we tend to overemphasize growth beyond a certain degree of network effect, as different scales bring different challenges.

Here’s a blog post I wrote about that:
blog.enkerli.com

I agree with the idea that online content can and should be a mixed revenue stream. Hulu Plus is a good example of a low enough subscription price, subsidized by a familiar advertising model.

@Kwanza While I pay for Hulu Plus, the leap was really hard to make. In fact, if I wasn't offered a free 2-week trial, I would have passed it up. The value isn't enough, especially with Netflix and DVR. The draw was to be able to watch all of the past episodes of a few shows, but the fact that I still have ads makes me feel like I'm kinda throwing money out the window.

@Alex Stone, I agreed it was a hard choice BUT, I also got rid of cable; so watching TV on my own schedule for $8, vs paying $100 for a bunch of channels I do not watch. Even DVR became to cumbersome as space would fill up and I would HAVE to watch shows by a certain time.

Consumption is changing and I really think the old model will reach a tipping point.

I think there will always be a mixture of advertising with social media. If you have a brilliant product, it is not much use unless people know about it and can buy it!

Advertisers need to sell a produce or retain/gain public recognition and social media is hungry for income.

I think someone needs to focus on making the ads less like ads and more things people want to consume.

For example, those Burger King games from a few years ago. Or free Slurpee Day at 7-Eleven.

How would we do that in social media? I think Facebook does a decent job of taking my information and giving me ads that I might care about. I know I've purchased a few shirts and things from those ads on the side. Also, FusionAds and Carbon ads are great, because they focus on really quality products.

@alex: Making ads look less like ads is the whole point of "native advertising". But it is still advertising, it brings in the money and -- in small doses -- is probably less intrusive. A few promoted tweets is less annoying than an animated banner ad.

As a producer of products I want/need work and one way is to advertise. Although one needs to target advertising and to some extent social media is a relatively new medium, so it presently organic.

With my private/personal hat on I hate advertising, so I totally understand the dilemma.

We've all been discussing paid v free in a very black and white (gray-ish) way. One possible hybrid model would be a multi-tiered approach. One that would perhaps scale the size, frequency and duration of advertisements depending on the payment model. Maybe having multiple tiered pricing levels of 0/1/3/5/10/15 per month with the associated reduction in displayed advertisements and increase in functionality would work? This way you have a much larger scope of people who can afford to pay something, while still having a fall back on advertisements for revenue generation. Another model might be for users to pay for the ability to choose or configure what ads they would see. Instead of data-mining the best match, get them to tell you directly

I think Tumblr's approach of pay-per-feature works. I also think Tumblr's ad model is great, too, as it properly leverages the community to make ads more genuine and, I imagine they get larger return on their investment.

I don't think people hate ads. I think people hate bad ads. Ads that feel like they're forced in to and don't align with the experience.

Good ads, we love. Old Spice's day of YouTube, Superbowl ads, "I'm a Mac", movie trailers, etc. these things work and are welcome. So how do we get these types of ads in to Facebook and Twitter?

If every ad had the production value of the Old Spice or Superbowl ads, then I'm pretty sure most people would like them. But they don't, they tend to be crappy videos, or brightly colored flashing blocks. Text ones are the most unobtrusive, but they are probably the least useful from an advertisers point of view. They're small, convey very little about the product and are easily overlooked. Successful ads engage with the customer, either on an emotional level or with an actual need for the product. Since ads are generally for something you either don't need or don't know you need, the ad must be able to grab your attention and educate you.

If someone integrates that level of engagement within a social platform, they'll win and win big.

BEST WAY TO DO AD IS AS DISCOVERY. NOT INTRUSION.

THIS WHY AMAZON ADS WORK GREAT. YOU THINK THEM JUST SUGGESTIONS FOR SIMILAR PRODUCTS.

ALSO WHY ADS ON FACEBOOK TERRIBLE. EXCEPT FOR ADS FOR SIMILAR PEOPLE YOU SHOULD FOLLOW.

THAT WORK GREAT, BUT HARD TO MONETIZE WHEN NOT PAID DATING SITE.

MAYBE TWITTER SHOULD CHARGE TO FOLLOW PEOPLE BASED ON NUMBER OF FOLLOWERS. MORE FOLLOWERS, COST MORE TO FOLLOW.

Exactly. Advertising is only successful when it engages the viewer's interest; it is not about targeting (as so many firms would have you believe) - since no matter how well targeted an ad is, if it doesn't engage an individuals's curiosity, enlighten them to something not known by them, or entertain them while simultaneously building an identity, it will fail because the viewer just didn't find the elements presented to them engaging enough to warrant further discovery - and thus they ignore the ad as just more Noise.

Returning to the point of the start of the discussion, I think something important is being missed here: whereas it's important to find a way to monetize a social model, monetization should be a secondary concern in developing a platform; make the thing so damned engagingly awesome that an individual will get so wrapped up in the user experience that they don't care whether it's got ads or a small fee attached to that experience.

The more time you spend trying to find the money angle in something, the less likely it is that you're using your time to create something truly earthshaking enough to transcend what's already available. Love what you're creating first - make it world-changing - and all else will fall into line naturally.

The build first monetize later approach is essentially what made the web business ecosystem work. Amazon, Twitter and even Branch would never have been created in the days when you needed to prove a return before you even got started.

I'm with all the people who say great advertising is good, bad advertising sucks but you can hardly make a law forcing advertisers to do this. What you can do, though, is have mechanisms so that good advertisements rise to the top, rewarding the most effective creatives.

Part 1 of 2
Bit of mind stream here, completely unformatted and not thought out... but what if...
Gamification is one of the best ways of increasing customer engagement, so why not turn Twitter in to a game. Allow users to trade (like a stock exchange) on their social stock. They can exchange/spend their social stock on promoted tweets, vanity urls or gift them to members. Stock can be earned by posting useful content that gets re-tweeted/favorited. It would also be possible using micro-payments to subsidize your stock with paid for tweets. The value of these payments would scale with your reach. This means that large companies can spend lots, while someone like FAKEGRIMLOCK doesn't have to, but can if they want.

Part 2 of 2
In this model you either have to be popular to get social media, pay for it or a mixture of both. It encourages payment by large companies to increase their reach, and gives them feedback on their "campaigns". Certain accounts would reach a critical mass, where they pay very little but have massive social stock, these accounts are extremely useful even then. They would encourage others to try and match/beat them or there presence would bring in new users.
Tweets could also have different levels of availability. A tweet seen by everyone could be quiet expensive, while one seen just by your followers might be cheaper. There are plenty of ways to make this interesting and more game like. But at its core it's still "Free-To-Play"

Actually hold on... I copyright that :p It's mine!

I am not against startups focusing on building their products first and creating a strong user base. However, there was a very good piece written by Joanne Wilson (Gotham Gal) about how some startups can't afford to not have a monetization plan in order to raise Series A - gothamgal.com - it is worth a read.

Completely agree w/ GRIMLOCK above. The best place for ads is discovery. Some great examples (+1 to AMZN)
1. 4sq/Amex deals nearby (look for place)
2. Thrillist posts -> JackThreads products (look for stuff)
3. Blog post with AMZN affiliate links
drumroll plz...
4. Promoted tweets/tweeps (look for interesting content)
Ads are bad when software is a utility. Bad examples:
1. Searching for exact answer (review/address of place, article you read once, blog you can't remember, research on topic)
2. Communicating w/ people you know

There are very large companies that provide ad-powered social utilities that shouldn't. Twitter is not one. Debatable, but I think discovery vs utility should be the litmus test.
Discovery ad:
tylertringas.com

This might be way off topic and "branch"-able but in the context of this debate, how do people feel about bloggers monetizing through affiliate links, Skimlinks, etc?

I don't bother. I created an Amazon affiliate account to do demos in workshops but when I blog a link it is a direct one. The tiny revenue isn't worth the feeling that there is a conflict of interest.

UNLESS BLOG VERY BIG, VERY FOCUSED ON TOPIC RELATED TO EASY TO BUY PRODUCT, IT NOT WORTH BETRAY USERS.

EVEN IF IS, STILL NOT GOOD. BUT AT LEAST MAKE MONEY.

I strongly agree with Fake Grimlock about this last point. It is very difficult to make money off blogs and annoying your users with advertisements is one sure way to turn them off

Open ads are one thing, but what doesn't look right is an affiliate link because it is semi-hidden and you are left wondering if the only reason the book is mentioned is to generate revenue. To show I really mean it when I recommend a book I prefer that people can see I am not getting any percentage.

ME ASK QUESTION: IF AD ONLY WORK WHEN IT FOR SAME THING LOOKING FOR IN STEAM, WHAT KIND OF STREAM EXIST WHERE THAT TRUE?

EXAMPLE: STREAM OF MUSIC, STREAM OF VIDEO GAME NEWS, STREAM OF PHOTOS OF DELICIOUS BACON, ETC.

BUT NONE OF THOSE SOCIAL STREAM. OTHER THAN PAY OTHER HUMANS FOR ILLICIT ACTIVITY, WHAT SOCIAL STREAM NATURALLY CONTAIN THINGS WANT TO BUY?

Hmm, seems like most Twitter ads are trying to buy your attention (follow this, read that) which of course has real value to marketers. When I'm on Twitter, I'm generally in discovery mode, looking for ways to spend my attention (stuff to read, people to follow). On search, fb, gmail, typically looking to communicate with friend/contact or find an answer with minimal attention spend. Might be very unique to my usage of these products.

ME, GRIMLOCK, NOT SURE ATTENTION REALLY MONETIZABLE.

TOO HARD TO MEASURE IF REAL ATTENTION OR NOT.

Monetizing your attention is challenging. What do people thinking of Personal - techcrunch.com - My understanding is that it gives the user control for when you want to share your private data with certain retailers or marketers. I have not used them much but I find them very intriguing. Also, they are Fake Grimlock backyard of Washington D.C :)

I don't see why it has to be either one or the other :) maybe mix all of them.
I do dislike ads and would rather have another model, but I don't think App.net model works that well... needs a loooot more usability value and looks empty at the moment.
On top of my mind, I could see Twitter working like the SMS model. First 140 chars are free, if you type more you could pay $0.05 or so, for the next 140 chars, and so on.
Obviously this would be easy to work around with apps that split tweets but, they could invest a little on stopping that... not sure...
It's great that we're going through a time where there's definitely space for a lot of experimentation :)

App.net is a really interesting case: I can't see them ever being successful with their current model. I'm convinced they have to offer a free version alongside the paid one at some point. This would make the service more useful for the paying users as well, especially the developers. I think they know this but cannot say that at this point, or they wouldn't have the paying customers.

Which brings me to another point: the business model of a free service is an essential factor in creating trust between the user and the provider. Thus I think the service providers should be as transparent as they can about their plans on monetizing - and users should start demanding this.