Twitter's revenue plans lie in mobile charging says key investor

Twitter should charge for the use of its service via mobile phones if it is to convert its huge popularity into cash, one of its venture capital investors has said.

The suggestion comes as momentum builds behind Twitter's plans to devise a business model that can generate money from its large number of users.

Earlier this month, Twitter altered its terms and conditions to allow it to implement targeted advertising across the site.

Joi Ito, a Twitter investor who has previously invested in Flickr and Last.fm, said: "When Twitter grows, SMS [text message] usage goes up.

"Sites are now able to promote across friends' [Twitter] networks, traffic to certain kinds of sites increases.

"There's a lot of things Twitter enables. And as a normal internet company would do, we'd look at who's benefiting the most in this value chain, and where is there the least friction [for Twitter] to get paid."

Ito said he was not speaking on Twitter's behalf, but added that he believes "mobile will be an important part of the [Twitter] strategy."

Separately, a new Twitter-based hotel booking engine has launched as brands attempt to figure out a way to capitalise on the Twitter phenomenon.

Inoqo claims to provide a solution for recession-hit hoteliers and travellers who need a hotel room at very short notice.

The service opened to hotels this week in the USA, France, Portugal, England, Scotland, Ireland and South Africa.

Twitter users can book a room by following one of Inoqo's "CityStream" Twitter feeds to watch the last-minute deals as they roll in.

Once a user has identified a deal, they place an order via Inoqo's own booking system.

The company is privately funded, and has plans for an affiliate program that will allow bloggers and website owners to embed widgets on their sites.