Are you asking how could they have made money or what cool things would they have done? I dont care about the making money part, the cool things they could have done being the Internet's message bus:

- Really good search, and access to the entire message archive, instead of hiding their archives in order to monetize it - Better lists/circles with more granular control over private/public messaging and groups - Better conversation ability, for example ability to make a list of users you want to have discussion with and have an easy way for everyone to follow the threads, ability to make it read only to the general public, so everyone can read but spammers can't ruin it, or take it private to everyone on the list. - Video/audio chat/hangouts might be on some people's list, I'm not sure it belongs in the core message service - Creative ways to make the message service the definitive breaking news medium. It already is but you kind of need ways to rein in the bogus news - Curation & moderation, methods to elevate interesting messages, though this moderation should be an option and easily disabled to avoid groupthink - Karma, though again it should be optional - Better support for real-time streams for topical hash tags like conferences, spam killing being the main issue. Clients can do a lot of this but spam killing benefits from support from the message service. - Openly embracing and facilitating academic research on their firehose, archives and social networks

This list could go on all night, buts just a few of my favorites.

Not sure. A bunch of ideas were floated in tech blogs at the time. Yammer was a paid Twitter clone, for instance. Also ideas about paying for API access. Hard to know as a bystander if any of them were seriously considered.