Over the past few weeks, the Twitterverse has been rocked by events that might have as much an impact on the Twitter ecosystem as asteroids did on dinosaurs. For better or worse, when the history of Twitter is written, these events will be remembered for either the birth of Twitter 2.0 or the beginning of the end.
Just over a year ago, I wrote Twipocalypse Now: Warnings of a Twitter Bubble and Twitter Fatigue: Rumors of Twitter’s Demise May Not Be Greatly Exaggerated for Twitip. In those posts, I suggested that Twitter and their third-party developers faced significant threats that would need to be addressed in order for Twitter and its ecosystem to not just survive, but to continue to flourish.
I had originally planned on revisiting those topics 6 months later to see how accurate my predictions were. However, Twitter’s rapid growth and evolution suggested something dramatic was on the horizon, so I decided to wait and see what would happen.
Well, something did happen. But it wasn’t exactly the Twitter 2.0 I was expecting. Indeed, while Twitter finally revealed a business model, they also demonstrated a change of business tactics that may ultimately prove to be self-destructive.
Twitter 2.0, Suicide or Bust
In my previous posts, I said that Twitter was evolving so fast that it might become unrecognizable. This Twitter 2.0 would boast massive changes to features, functionality and layout. The Twitter 2.0 era finally began when Fred Wilson, a partner at Union Square Ventures who invested in Twitter and sits on its board, posted The Twitter Platform’s Inflection Point, a controversial analysis suggesting, among other things, that Twitter might ultimately compete with its own third-party developers.
Within days Twitter announced that it has acquired Tweetie, one of the most popular Twitter iPhone apps, and will rename it Twitter for iPhone (it’ll also be free). Then, Twitter co-founder and CEO Evan Williams announced that Twitter had also made a Twitter app for the Blackberry. In the days since, Twitter has announced their own app for Android phones and its own URL shortener.
And if that wasn’t enough, Twitter also announced that they would finally launch an ad platform (the aforementioned business model) effectively dropping napalm on Tweetup, the new third-party twitter-based ad platform that idealab announced the previous day.
The Redux Reflux
Clearly Twitter needs to evolve, but it should do so by embracing its developer community, not alienating it or taking it for granted which is what it appears to be doing. By building its own URL shortener and a rumored photo sharing service like twitpic, Twitter is sending the message that if it likes an app or service and for whatever reason can’t or won’t buy it, that it’ll just steal the idea and build its own.
Furthermore, buying Tweetie and releasing apps for the other major mobile platforms has effectively shut out all mobile app developers. Unless those developers come up with something truly unique, the game’s over. To say that this past week must have made all third-party app developers nauseous is an understatement.
While people like angel investor Chris Sacca urged developers to ‘stay the course’, one has to wonder what possible incentive they would have to do so. Twitter has effectively turned its back on the very people who helped propel the service into the stratosphere with the creation of hundreds of services and apps that extended Twitter’s utility and filled gaping holes in its functionality.
Surprise, Surprise!
None of this should come as any surprise if you read Twipocalypse Now where I suggested that Twitter could compete with their developers. I just didn’t really think they would.
I also warned about third party services with questionable or no business models being dependent upon a single service which itself has no business model. Certainly being a third-party developer for any service is risky business, but unlike TweetDeck or Seesmic (listen to my interview with Seesmic founder Loic Le Meur where we discussed Twitter dependency) who have broadened their services beyond Twitter, almost all of the other Twitter apps and services are exclusively tied to Twitter.
Oops!
So, What?
So, it appears that Twitter may be intentionally using its community of third-party developers as a free R&D office by letting them assume all of the risk of enhancing the service. Surely, this isn’t a new accusation and there are certainly developers who will happily assume that risk, but what was once pure conjecture appears to be turning into fact, and appearances do matter.
The implications of all this cannot be understated. Twitter remains hugely dependant on those third-party developers, perhaps much more than it is aware. If Twitter continues to alienate them and continues to create an atmosphere where developers have little if any incentive to participate, it will stifle a vital source of innovation. Without an incentive, third-party apps and services will ultimately be abandoned by their creators with as many as 99% ultimately dying.
As a result, much of what makes Twitter so popular will cease to exist and a large number of Twitter’s users may just leave. In short, Twitter needs that innovation engine, and in technology, innovation is life.
“I’ve Created a Monster!”
Finally, if all that wasn’t enough, Twitter may have also unintentionally created new competitor as many angry twitter app-makers are now planning how to replace Twitter. While only in the early stages, these developers are experienced innovators and experts in various aspects of Twitter’s platform. I wouldn’t discount them, especially since anger has always been a powerful motivator. It will be fascinating to see what sort of Phoenix will arise from the ashes of all those Twitter apps.
When all is said and done, it would be a shame if the service we’ve come to love so much dies by its own hand. Of course, it’s not like we haven’t seen that before either.
Further Reading:
Twipocalypse Now: Warnings of a Twitter Bubble
Twitter Fatigue: Rumors of Twitter’s Demise May Not Be Greatly Exaggerated
Who just got screwed by Twitter
Neal Wiser is President of Neal Wiser Consulting and Co-Founder of Addicted to Social Media. With over 15 years experience in the Internet, Interactive Marketing and entertainment industries, Neal is strongly focused on helping businesses maximize their connections, relationships and results with their customers and clients. Neal has worked for Comcast, GlaxoSmithKline, Qwest Communications, Paramount Pictures and Warner Brothers and his clients have included the United States Postal Service, Hyundai, DreamWorks Studios, Major League Baseball, over 20 major pharmaceutical brands and NASA. If you would like to contact Neal, he can be reached via Twitter @NealWiser. You can read more Twitip posts by Neal here.
@JohnAguiar
Can you say MySpace..lol
I agree that Twitter may shoot themselves in the foot in the long run.
Starting as way to communicate and now turning into a marketing, business mode may piss off a lot of users.
My biggest issue is with how big they are, they spend more time on new features, new home screen new design coming.. why not take that energy into making Twitter work, work each day all day..lol
Facebook doesn’t crash, Myspace doesn’t crash, Tumblr doesn’t crash etc…
So before monetizing the shit out of twitter and making it look pretty, why not fix the backend stuff so ‘it works”
@davidrisley
Twitter is a service people have been using for free forever. People still don’t have to pay for it and probably never will. Least they can do is stop complaining like spoiled little children when Twitter starts wisening up on how to survive in a world where cash talks.
People have been talking about Twitter’s lack of a business model for some time. Now they’re trying to get one and people think it is the end of the world.
@nealwiser
Thanks for your comment, but I think you missed the point; certainly Twitter needs to make money, but I’m questioning if whether the way they’re going about it is going to harm the company. Obviously, I think they’re placing themselves at considerable risk.
@davidrisley
I guess we’ll see how it works out, but I still disagree at this point.
For one, almost any move or enhancement Twitter could possibly make would step on some developer’s toes because 3rd-party devs have pretty much created solutions for everything you can possibly think of. If Twitter comes in and sees an advantage to having something directly integrated into them to enhance the service and the brand, I think they should do it.
Secondly, it’d be hard not to state the obvious and that is that any developer who staked their business model on Twitter really made their own bed here. You observed this in your post and correctly so. It wasn’t smart planning. It was only a matter of time before Twitter made some moves like this. Honestly, I don’t think Twitter is going to suffer because of that as much as the devs do, and even that is still up for debate.
Thirdly, all the solutions out there will continue to work. People still have a choice, for instance, on which Twitter client they want to use. Tweetdeck isn’t going anywhere.
It is kind of like Microsoft integrating anti-virus into Windows. Its nice for them to say they have an in-brand solution, but it sure isn’t hurting the third party companies much. 
Twitter is like the OS, and as long as they have that API, I think there will be a thriving library of third-party development going on.
I think these changes just sent a much-needed shockwave through the dev community to get back into the real-world. And, personally, I don’t think this is going to hurt Twitter at all.
We’ll see, though.
@JohnAguiar
David great points.. as far as Twitter making money.. I’m all for it,, shit I make money with Twitter and so does a lot of people. it’s only right Twitter makes money to.
My gripe is yes it is free, but so is facebook and tumblr, and 100 other social sites and then dont crash alll the time,,lol
Before you focus on making money and the cosmetic tweaks why not work on the back end first, get it stabilized and working, then move to money and pretty design.
@kbloemendaal
Why is it that whenever somebody wants to make money on their product (especially one they have worked on for years) all the people come rushing out to say “shame on you”.
Who are we to tell Twitter (arguably the best social media site ever) how to make money? And the notion that some other site is going to come in and take over is nonsense too, how many times has it been tried now?
Here is a question? Would you pay to use Social Media is all the popular ones required it? I would.
Blizzard, with its 20 million World of Warcraft players, does this very thing over and over. They allow developers access to an API so third-party add-ons can be created for the game. Once an add-on becomes popular, Blizzard builds it into the game themselves. Further, they do not allow any third-party developers the ability to make any money whatsoever from the add-ons. Yet, developers keep developing as, what has already been stated, a freelance R&D department.
Most players still use the third-party add-ons instead of Blizzard’s own because they’re just better and updated more often. Loyalty to players (i.e.: users) who develop add-ons better than Blizzard is very strong despite Blizzard’s efforts to profit from developers’ ideas.
Bottom line: I don’t think Twitter can or will build better apps than the thousands and thousands of developers out there. What they may do, however, is limit their ability to access the API or make any money from doing so. That would suck for the devs, but I don’t think it will stop them from developing.
My $0.02
@kikolani
Every free social network has some kind of downside. Facebook may be free and not crash as often, but their recent update left a lot of privacy vulnerabilities and just plain annoyances that are not fixable (like not having control of what gets posted to your wall – only being able to control who sees it).
And as much as it sucks for the developers who have built so much around Twitter, it could come down to not putting all of your eggs in one basket. Unless the developer is able to copyright their software and its functionality, then anyone, including Twitter, is free to make something comparable. Plus, at least if Twitter itself makes certain apps, it will be easier to trust than new apps by developers that you never know what they are doing with your credentials once they have them, no matter what they assure.
The problem with stabilizing the old design vs. coming out with something new is that maybe the new platform is being designed to be more stable. Why spend a ton of time stabilizing an old platform when it might take just as much time to design and stabilize a new one.
@jimconnolly
Thanks for a well thought out post, Neal.
I think Twitter are currently taking a few very risky steps, as they seek a worthwhile business model. I hope they make money and as David said earlier, I think they will.
Not sure I would want to be a Twitter app developer right now though. Let’s see – It’s going to be interesting, that’s for sure!
@JohnAguiar
Yes stabalizing a new design is fine,, but the new design isn’t here yet and the site crashes almost daily for over a year.
That’s ridiculous. Yes facebook has made huge mistakes.. but it runs lol
We still don’t truly know what Twitter does with all the info, we do know they sell some of it.. so how safe is that?
I luv Twitter and I’m glad they are finally making money with it.
So more power to them.. It has been the biggest SM benefit to my business. I use it daily and I don’t see myself stopping anytime soon.
I hope they make a billion dollars and use it to stabilize and add features to take it to the next level.
@taylormarek
Thanks for the post. I was wondering for the longest time why Twitter thought it would be fine competing with its developers when they should embrace them and treat them as open source software does. More revenue that way.
@seolman
Attention Twitter Developers! Build any good application for Twitter and you may have it copied by Twitter and receive no compensation. Oh, sorry – there I go stating the obvious again.
@kbloemendaal
@Dave Attn “All” developers: Build a great application, it may be copied and you will get no compensation! Oops, I just stated the obvious!
It happens all the time! People have been making money off twitter (including developers) for several years!
@dbarnhart
I wrote pretty much the same thing here:
http://www.learningtwitter.com/2010/04/24/is-twitter-on-the-right-path/
and here:
http://www.learningtwitter.com/2010/04/24/when-will-twitter-start-treating-developers-as-allies/
@KennedyPittman
Is Twitter shooting itself in the foot? Probably. Is it going to kill Twitter? I really don’t think so. If you circulate in the dev circles and follow the mavens then it sure looks like a lot of people are upset. But these people are not the masses. The masses aren’t going away – at least not due to apps or sponsored tweets. Look at the aplusk crowd if you want to see the Twitter user base, not just who we might be connected to.
@itcareercoach
Has Twitter committed suicide?
I really don’t think so.
Twitter may take some hard hits at their own revenue yes but I think in the end they will survive.
I think Twitter may lose the top layer of new Twitter users but I think they will recover and grow because of their loyal, hard core twitter user base.
As a society we have grown to count on Twitter for lots of things such as following our favorite stars, and marketing ourselves … who has a blog that doesn’t have the RSS feed on Twitter?
I agree with Jim’s comment about not wanting to be a Twitter developer right now.
Twitter is a service people have exercised their freedom forever. People have yet to pay for it, and probably never will be. At least they can do is stop complaining like spoiled children younger Twitter wisening even begin on how to survive in a world where talking Cash.