Picture 20.pngAnalysts at Sanford Bernstein have issued a bearish outlook on Twitter, according to Dealbook. In fact, they are posting a caution sign on the company: “Stay Away.”

The analysts said that monetizing Twitter “would be difficult at best and likely unsuccessful.” People who sign up for free services tend to resent a company for trying to wring revenue from the business later. Subscription fees are out of the question, they said, and advertising-based revenues don’t seem to have yielded enough cash flow to make a Web 2.0 property viable.

Speculation about Twitter has been echoing in the yellow hills surrounding Silicon Valley lately. The chief executive of Google has been peppered with questions about whether the Web search giant might have its eye on Twitter.

But the Sanford Bernstein analysts think Google would do best to steer clear, as it is still struggling to make money from YouTube, a previous takeover target, and the social networking site Orkut, which it created in-house.

Whoever buys Twitter, they wrote, “will likely have to operate it at a loss in perpetuity, or until the next cool Web 2.0 social networking concept comes along and Twitter tweets no more.”

The idea of operating Twitter at a loss in perpetuity is kind of interesting.

Picture 22.pngThe Twitter web site shows thumbnails for 38 employees. The service, which is growing by leaps and bounds, had more than 4 million unique visitors in February, up from 2.6 million in January. They closed a $35 million financing round in February, bringing total funding to $55 million.

The service is puts pretty lean pressure on its servers: 140-character text messages, with a limit to individual calls on the system in any hour. The service has to pay for SMS text messaging over cell phones — analysts put this cost at about $1 per user.

In general, informed guesses (the company won’t share any information) puts the current burn rate at about $9 million at these usage levels. (A good analysis is here.)

This feels like a pretty lean start-up. And, if you use the service, you know all the users are expecting a revenue model to appear. Most are ready to accommodate a sensible approach. I’ve talked about the opportunities in search. There’s marketing sponsorships. And there’s contextual text ads. The company isn’t without runway — figure another two years with the raised funds and the levels of growth. They should be able to figure it out.