A recent announcement from Twitter highlights the fact that the company is seeking to make more money from its service. This is certainly not a surprise; Twitter is widely used, yet there is little advertising, other than sponsored tweets and accounts, and the company needs to monetize its user base. But developers are worrying about Twitter restricting use of its API, and whether this will lead to a “closed garden” approach.
Twitter sees some 400 million tweets posted every day, and the company initially let anyone who wanted work with this data. Developers of third-party Twitter applications take advantage of this openness to offer features that Twitter itself does not. But if Twitter starts rolling out ads that get piped into these applications, how will users react?
The problem with Twitter is that its simplicity is what prevents it from making money. The company could insert plenty of ads on its own website, but they would only reach users who interact with Twitter via its website; those who use third-party clients wouldn’t see anything, and wouldn’t generate any income.
Twitter’s being a one-trick pony may lead to long-term problems. There is no doubt that this is a popular platform, but part of what has ensured its popularity is the ecosystem of third-party applications that allow users to choose how they want to tweet and read tweets. For Twitter to make money, they have two choices: drown users in ads, or expand their service. If they do the former, they may lose users, and another company might try to create a similar service. If they do the latter, they may dilute their brand.
I find Twitter to be useful, for several reasons. It allows me to stay in touch with friends and co-workers, and serves as a kind of digital water-cooler. It also allows me to get information from companies that interest me. And, finally, it allows me to share information that interests me, including articles like this, to my followers. But if suddenly my timeline – even in a third-party application – were to be drowned in ads, I don’t know if I’d continue using it. Twitter has certainly become a habit, but Facebook used to be a habit as well, and I don’t visit their website much any more.
Twitter is in a tough spot, and needs to figure out how to move into the future. They run the risk of alienating much of their user base, losing users, and devaluing the brand. Monetizing a service like Twitter is not simple, and I hope those making these decisions do the right thing for their users. Because, after all, without these users, the company has nothing.
By the way, if you don’t follow me on Twitter, maybe you should.Posted: 7/10/2012 by kirk | Filed under: Web | Tags: Internet, social media, Twitter, web | No Comments »