Pete Cashmore makes the silly claim in CNN that Twitter Analytics “could have been a money-making machine”. That’s a ridiculous statement from someone who publishes a site based on advertising revenue. The most important reason for Twitter to “give away” an analytics tool is so they can “sell” advertising. This is a direct analogy to the classic “free lunch” sales tactic. You come for the food and stay for the beer.
Twitter is sitting on one of the most important data streams in the world, and the best way to monetize that is to sell ads. Google has already proven that. Google Analytics, and its little brother built into the Adwords system, are free so advertisers can see that their money is being spent wisely, and figure out how to spend more. Twitter is in the early stage of the advertising business, and right now their greatest challenge is proving that Twitter data is valuable. Most importantly, they must prove that Twitter users act on that data. This is exactly what their analytics tool will do.