The founders of Twitter couldn't possibly have imagined the popularity of their little short messaging service. In the last year Twitter has gone mainstream, with everyone from Oprah Winfrey to members of Congress getting onto the Twitter bandwagon. But as Twitter usage grows, it appears that company is struggling to scale to meet demand.
Twitter outages are nothing new. It's to be expected that any service that has grown as fast as Twitter would run into bumps. In the last week the Twitter developers had to turn off the ability to see replies to those who a user doesn't follow, triggering a firestorm of negative feedback. These concerns are Manna to companies such as Yammer and Present.ly who offer alternatives to Twitter for business customers (as well as to Facebook which increasingly is trying to integrate Twitter-like functionality into its own system. But they also underscore a larger problem, Twitter still hasn't developed a solid revenue model that will allow it to raise the funds it needs to rapidly scale its infrastructure, leaving it vulnerable to negative publicity and perhaps even competitors.
Twitter as an ad-supported service is probably a non-starter, rather IMHO the real revenue possibility lies in analytics, selling services to enable marketers for example to gain a deep understanding of twitter usage around specific products, keywords, or trends. Perhaps Twitter could even compete directly with the business services mentioned above. Or, perhaps the end-game is an acquisition by someone with the infrastructure to meet Twitter's needs.
Regardless of the possibilities those looking to leverage Twitter should pay special attention to the ability of the service to scale, and keep their eye on potential alternatives down the road.