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While correct, your description seems a bit reductionist to me. Twitter's value doesn't come from its ability to shuttle short messages around the web -- but from it's cultural presence, it's more-open-than-Facebook social graph, and the large amount of people who use it as a simple-enough-for-ma RSS reader.

If Twitter aims to be yet another RSS reader, so be it. But I doubt that's what they're going after.

Twitter indeed has a strong presence on the web, but I'm wondering how that presence can be translated into a self-standing business.

Actually, they have been making quite a bit of money in the sale of public tweets. Wholesale data with their "Firehose", 50% and 5% of all tweets stream is not cheap if that's what you want.

http://business.twitter.com/

'nuff said.

They have tons of users, they can make some good money with ads. They're not even pushing hard right now but I think they're not losing money though I may be wrong.