Twitter's business model
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When I was in college, professors used to ask questions that are much harder than the question Allen Stern asks in this piece.  The NY Times crossword puzzle is harder. Geez, installing a new hard disk in a MacBook is harder, and as I've found out that's pretty easy.  Okay what is Twitter's business model?  They give away access to the API only to find that add-on devs have a business model selling Twitter clients while Twitter itself is left sucking air.  And this is some kind of problem? We should all be so lucky. Here's what you do if you're Twitter.  Distribution. How much you want to bet that Twitteriffic reaches a very small number of Twitter users.  Twitter, of course, reaches every Twitter user. So what could be easier than to offer to sell everyone a client that makes Twitter work a lot better?  And of course Twitter would be entitled to some of that money. Now, imagine that Twitter was really ambitious and they wanted to design a cell phone around Twitter. One that could make phone calls and play MP3s and do SMS but also had Twitter baked in.  Okay, so you can't imagine Twitter getting into the hardware business or being a cell phone service provider. But what if one of those did a deal with Twitter, or even bought Twitter? Then you'd be paying a monthly service fee to use Twitter, and might have chosen TMobile or Sprint over Verizon or AT&T because they have Twitter and the other guys have Microsoft's ripoff of Twitter. Or Google's. I think there's a premium for being the original guy, if you play it right (I never do, but Evan Williams does this pretty well.) Anyway, there are lots of ways for Twitter to make money once there are enough users. And right now their business is to grow and their first priority is to stabilize their service. This isn't based on inside knowledge, but comes from reading the tea leaves and applying common sense.
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The rise of social networks such as Facebook and wireless gadgets such as the iPhone has set off a small stampede of companies hoping to build on or replicate their success. Many are counting on advertising to pay the bills.
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I love Twitter, but there have been a lot of problems, and this is too much. They're taking it down tonight, for two hours, and we're hot on a big story, and it's developing -- on Twitter. This seems like a bad night for Twitter to go to sleep. (But there probably never is a good night.) I don't think the Twitter guys really understand how much we're doing with their service.  It's been going down a lot lately. And while other people have been complaining about it losing posts, I had never seen it lose one, until yesterday, and now it's losing them regularly, for me too. Read the first three words of this post again.  They raised $5 million, it seems now it's time for them to get the bugs out, hire some people who really understand scaling, if necessary re-implement the system from the ground up. Do whatever is needed to make it as reliable as the other tools we depend on. We need Twitter to work. It's not a fun experiment for us, we're using it.  Jack, Ev, Biz, Fred -- please take note. Postscript: The announcement changed, now they're saying it'll be down on Sunday night. Much better. Thanks!
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I think I know how spammers are going to enter the Twitter world. It'll come in the form of replies, which basically function like email. You can direct a message with a url to anyone as long as you know their username. Here's a screen shot that illustrates spam being sent to a hypothetical user. I didn't send it of course.  Another problem, the destination of the url is likely masked through the use of a shortener so the user could be clicking through to some really nasty place, with no way of knowing in advance that's where they're going. (Such messages probably wouldn't alert you in advance that they're about meds or poker or sex.) The press and bloggers will run stories saying "Spam Comes to Twitter" and they'll be right, even though it won't be the main part of Twitter. Users will expect the company to do something about it, but I don't see what they can do other than eliminate the feature. Users will certainly want the ability to completely opt-out of replies.
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What social web services do you get the most out of? And which ones are just a waste of venture capital? We want to know. In Monkey Bites.
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Social networks have made fortunes setting up Web sites that allow people to post profiles and trade messages. Now, the rank and file are getting the chance to make some cash from their contacts.
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Web 2.0 companies, observe how Loic rolls his product out. It's done personally. Not with a big bang, but with nurturing, one user at a time, at first, then it will fan out, but it will always have the personal touch, because it began that way. In contrast, giving an exclusive to one press person or one blogger can be much less effective. It may get you on top of the ladder for a moment, but the glory fades fast, and then what? And your first impression is in the hands of someone else. What if he or she doesn't like you or your product? (Or worse, if they have a conflicting interest, I've seen it happen.) You could get sandbagged. Most PR firms show you how to do the big bang rollout, because that's all they know. But even the greatest promoters, with the most press credit (I'm thinking of Steve Jobs) won't rely exclusively on the press to carry their product. They guide it, they put their personal signature on it, they create an experience. No doubt in the next few days there will be a lot of rollouts because of the Web 2.0 conf in SF. The only ones you'll read about here, with any positive juice, are the ones that roll out with personality.
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Dan Farber: "It's not hard to imagine a contextual ad showing up every time you Twitter something. Twitter 'I am drinking beer with friends' and a Budweiser ad shows up. Now imagine the Twitter revolt." Oh yes there would be quite a revolt, a powerless one, unless there was an alternate service we could all switch to and then assuming we could get off our asses and actually switch. Yeah, we're good at screaming, but not too great at acting, here. I'm a bit of a Twit, myself, and I'd find it revolt-worthy if they tried to interrupt or punctuate discourse with product placements, but then Twitter's destiny is, imho, to be acquired by a phone company and sold as a feature that gives users a reason to use one brand of phone over another. Not as a way for advertisers to hitch their "messages" on our discourse. We've seen how well that has (not) worked with advertising on email. Not likely to work much better on Twits. Imagine if Nokia offered a cell phone with Twitter built-in, a checkbox for SMS users (default on?) -- "Do you want to send SMS messages to your buddy list?"  Don't you think the kids would go for that? (Maybe they can already do it, it's likely that I'm that cluelss.)
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Hefty valuations = a bet on the future.  That future is clearly open source + SaaS, based on the multiples people are willing to pay.
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A new study by Parks Associates indicates that attempts at monetizing social networking sites may backfire, leaving providers with few options to generate revenue from their users.
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The company's new software might let private information go public. Also: A new website pays you to help your friends buy products  & hellip;. LAN operators start to gear up  & hellip;. and more.
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So-called 'white-label' social networks are proliferating in vertical markets and enterprises.
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Company is developing software to help big media companies integrate social networking and community into their Web sites.
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Micro-bogged news feeds While struggling to get its chip machismo back, AMD has decided to distract itself as much as possible by rolling out a new Twitter-based news service.â¦
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The Web 2.0 conference is under way in San Francisco, so the B.S. will be flying. Thanks to the innovators in Wired's Gadget Lab, you can contribute to the dung heap by using our Web 2.0 Summit startup and press kit to tout your own flim-flam company.
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Social network will allow individual creators to put a price on their content.
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In a new post to his blog today, Stuart Herbert continues the theme he started in a previous post about a business case for PHP. In this new entry, he shares some things he's done to further the effort.   To turn this from an idea into reality, I've setup a Google group where anyone who is interested can join in, and help build this resource. Please come along with your ideas and concerns, and let's see what we can achieve together.   He also suggests some "first steps" to get the ball rolling, namely a list of topics the business case needs to cover.