App.net: Like Twitter, but It Costs You

Instead of selling ads, App.net charges users a subscription fee
Dalton CaldwellPhotograph by Gabriela Hasbun for Bloomberg Businessweek

At a time when the world seems to have more social networks than it needs, Dalton Caldwell is not only building a new one, he’s asking people to pay for it. So far, it’s actually working.

In early July, Caldwell, the 32-year-old founder of San Francisco-based Mixed Media Labs, wrote a post on his blog condemning Twitter’s embrace of advertising. Caldwell argued the company seemed to be paying more attention to sponsors than its own users, who are bombarded by unsolicited messages. The post sparked e-mails from industry veterans and fervent online chatter, he says, and convinced him that people would pay to be able to have online conversations without marketing messages. Caldwell says he also received support from programmers, who are frustrated that Twitter keeps changing restrictions on apps it will support. “That made me realize that this resonated with people and you could build a business that appeals to developers,” he says.