The Twitter Tragedy Sep15

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The Twitter Tragedy

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To become a successful company, it’ll have to kill the openness that makes it great.

It’s unusual for a corporate blog post filled with bureaucratic language to cause an Internet uproar, but that’s exactly what happened last week when Twitter published an item with this innocuous-sounding headline “Changes coming in Version 1.1 of the Twitter API.” None of the changes Twitter mentions, taken in isolation, seems like a big deal. But in the aggregate, they’re seen as an aggressive move against once-friendly collaborators, the third-party developers who use Twitter’s application programming interface to write apps like Tweetbot or Twitterific to access the service. Developers who write the apps and their friends in the community feel betrayed.

In its defense, Twitter’s only doing what it has to do to build a successful business. At the end of the day, that’s the real problem. Not every great idea is a great business, and the entire success of the Internet is built on the back of open technical standards that aren’t businesses at all—the protocols that make up email, the Web, and the rest—and to reach its full potential that’s what Twitter would have to be.

The Twitter fracas comes down to the fact that the company has a big problem. As a product, it’s a huge success with millions of users and tie-ins to everything under the sun, but as a business it has hardly any revenues. And yet keeping all those servers running is an expensive proposition. Venture capitalists have been willing to fund the operation since the basic service is so appealing and popular, but obviously at some point the goal is to earn a profit. And since Twitter has so far rejected the exit strategy of selling itself to a more established firm like Google, its investors will be looking for a big profit.

The most obvious approach would be more aggressive advertising, but here the third-party clients are a big problem. In Twitter’s earliest days, the service was primarily built around the idea of sending and receiving messages via SMS with a fairly crude Web interface as a fallback. But the service came with a wide open Application Programming Interface (API) that let people write apps for computers and smartphones that could access the Twitter stream. This capability is what made it possible for Twitter to scale up. Eventually the popular multi-platform client Tweetie was acquired by Twitter and became the “official” first-party client. The trouble here is that if third-party apps can access Twitter’s data and then display it whichever way they like, then stripping ads out seems like an obvious feature to offer. What’s more, unlike Twitter itself, the third-party developers actually do have a clear profit model—they sell software to users. But if Twitter wants to get into the paid app business, it stands to reason that they’d want to clear the field of competition.

So even though the screws are only tightening slightly, the tech savvy see it as a sign of things to come and are reacting with panic and outrage. Marco Arment says it’s “some serious bullshit on Twitter’s part,” while Dan Wineman says they’re “on the path of Prodigy and CompuServe.” The issue even expands beyond the narrow domain of third-party clients, with Tumblr cut off from access to friend-finding and speculation rampant that Flipboard will be barred soon.

The sense of betrayal is easy to understand. On the other hand, the basic reality of the status quo is that the more successful app vendors were making money and Twitter wasn’t. 

And it’s not just app developers. Lots of people are deriving meaningful value from Twitter’s platform. Politicians use it to get their message out, big companies use Twitter as part of their branding strategy, Twitter’s been a key enabling technology of the food truck boom, and every Web publication on the planet uses Twitter to drive traffic. Everyone’s capturing value here except the people paying the bills to keep the service running. Twitter needs to do something to recapture that value.
 

Written by Matthew Yglesias of Slate
Article first appeared on Slate  |  http://www.slate.com/authors.matthew_yglesias.html

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