Twitter's (NYSE:TWTR) stock recently rose after the social networking company seemingly revealed the development of a new subscription platform in a job listing. The listing, which called for engineers to join its new "Gryphon" team of web engineers, stated the subscription platform would be "reused by other teams in the future" and be developed with its Twitter.com and Payments teams.

Twitter subsequently removed any mentions of "subscriptions" from the job posting, but many investors are likely wondering what Twitter is cooking up -- and if it would diversify its business away from its online ad revenue, which rose less than 1% annually to $682 million, or 84% of its top line, amid the COVID-19 crisis last quarter.

Twitter's headquarters in San Francisco.

Image source: Getty Images.

Why would Twitter develop a subscription platform?

Twitter hasn't revealed any more details about Gryphon yet, but the announcement hints at several potential projects.

Several years ago, Twitter surveyed users regarding their interest in paying for new analytics tools, breaking news alerts, and additional data regarding their followers' tweets. Former CFO and COO Anthony Noto also previously discussed the possibility of adding paid services to TweetDeck, the power user app it acquired in 2011.

Those paid services, which were never implemented, could complement Twitter's data licensing business, which gives companies (including news services and high-frequency trading platforms) paid access to a "firehose" of bulk tweets. Twitter's "data licensing and other" revenue rose 17% annually to $125 million, or 15% of its top line, last quarter. Adding more services to that segment would boost the high-growth segment's weight on Twitter's top line.

A young woman uses a smartphone.

Image source: Getty Images.

Meanwhile, Facebook's privacy issues caused many people, including chief operating officer Sheryl Sandberg, to declare the social network would need to become a paid service if it removed its ads. Twitter CEO Jack Dorsey has repeatedly criticized Facebook over the past year, so he could be mulling the launch of a paid ad-free tier for Twitter.

Twitter could also allow its top tweeters to offer paid subscriptions to their accounts, as Amazon's Twitch does for its top broadcasters. Those subscribers could generate higher revenue per user than the platform's online ads.

Twitter's mention of its Payments team, which handles billings for ad campaigns, also suggests its "subscriptions" could target advertisers and developers instead of users. The Payments team could also expand Twitter's partnership with online payments company Square (NYSE:SQ), which is also led by Jack Dorsey.

Twitter and Square teamed up for in-app payments five years ago, but that deal focused on political donations instead of the e-commerce market. Integrating Twitter's tools into Square's payment platform as a permanent subscription service for merchants could benefit both companies.

A chilly reception for paid social networks

Those ideas are interesting, but there doesn't seem to be much demand for paid versions of social networks right now.

Fifty-eight percent of the respondents in a Washington Post poll in 2018 said they wouldn't pay Facebook for a subscription. Of the rest, 16%, 15%, and 11% were only willing to pay $7, $5, and $1 per month, respectively.

Citi analyst Jason Bazinet recently estimated Twitter would need to charge U.S. users $50 annually and international users $20 annually to replace its lost ad revenue. Based on the chilly reception for a paid version of Facebook, those targets could be tough to hit for Twitter, which only has about 10% as many daily active users as Facebook.

But it's all speculation for now

Twitter raised a lot of eyebrows with its latest job listing, but investors shouldn't assume it's launching a paid service to reduce its dependence on ads. Twitter already offers subscription services to companies and advertisers, and there's no indication it will start charging users to remove ads or gain access to premium services yet.