

Suggestion to Twitter: Here’s how you monetize without ruining your ecosystem - pytrin
http://www.techfounder.net/2012/09/01/suggestion-to-twitter-heres-how-you-monetize-without-ruining-your-ecosystem/

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diego
Yes, there is more to it than you're aware of. For starters, how do you think
Twitter's API customers would monetize _their_ applications? They would be
paying Twitter for the privilege of attempting to monetize tweets. It only
makes sense to pay if they can extract more value than Twitter can.

If someone finds a way to monetize tweets that's more effective than
Twitter's, then Twitter would have an incentive to copy it, therefore
competing with its customers.

Long story short, that's the reason Google stopped selling white label search
via its api to customers like Yahoo ten years ago.

~~~
pytrin
I think you missed the point of the article. Right now, Twitter has rigid
limits in place - you don't think it'd be better for developers to at least
know in advance they can go past that limit, even if it means they have to
pay?

There are many uses for twitter data outside of just repeating the tweets with
a different design. There are quite a few Twitter apps that generate revenue
and some have also been acquired by bigger companies. Twitter and Google main
service offering are not comparable, since Twitter has the actual data while
Google is a gateway.

~~~
diego
I didn't miss the point. Twitter _does not want_ developers to go past that
limit. Pay or no pay, it doesn't matter to Twitter. It's not part of the plan.

~~~
hythloday
From the actual announcement:

"we will require you to work with us directly if you believe your application
will need more than one million individual user tokens"[0]

which sounds like "show us the money" to me. You can of course assert that "we
want to talk to you" _obviously_ means "we don't want to talk to you", but
once you do so without evidence you're firmly in tinfoil hat territory.

[0] <https://dev.twitter.com/blog/changes-coming-to-twitter-api>

~~~
diego
Of course they mean they want to talk to you. But that doesn't mean they want
money. More likely they'd want to acqui(hi)re you and incorporate whatever
made made you successful into their product.

~~~
denzil_correa
Which in some sense is still wanting the money!

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gk_jam
All these articles claiming Twitter is restricting developers using their API
are all missing one important distinction: Twitter is only restricting Twitter
client developers. There are hosts of other developers who are using the
Twitter API with no restrictions, those building value add services in Social
CRM (social media monitoring, analytics, data reselling, sentiment analysis,
etc). Yes, Twitter's new ecosystem is geared towards the B2B market. But to
say they're restricting developers across the board just isn't true. However,
it seems most of the tech blogs tend to think only of consumer-facing client
apps as the members of the Twitter ecosystem, and so forget about all the
other apps out there, the ones they're not restricting.

~~~
dustyreagan
Well, I think the point is, building Twitter clients use to be allowed, even
encouraged, by Twitter. And now it's a big no-no. So even though they're only
restricting new client development, the restriction affect anyone developing
with the Twitter API. What's not to say the type of app you're building today
won't be restricted tomorrow.

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scott_s
As I understand it, Twitter already makes plenty of money off of their data.
Many companies are interested in getting access to more data than what's
available for free, and they pay for it. Check out DataSift and Gnip: they are
resellers of various social media data.

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badclient
_Each has its own merits in the context of sports competitiveness, but in
Twitter's case there is no reason for a hard cap at all. What does Twitter
gain by putting a hard limit on API usage?_

There _is_ a reason for a hard cap: the limit's goal is to ensure twitter-
owned clients dominate the market for basic twitter use.

You may have a point by saying that twitter can simply make the tax per
additional tweet equal to the approximate revenue they plan to lose as a
result. But that figure may be hard to calculate, especially its long-term
value. So even if a company is willing to pay 5x to twitter per additional
tweet over the hard limit, twitter doesn't know the long-term impact of it

~~~
pytrin
My argument is that they'd make much more revenue by taxing API than they hope
to make with ads. Their API usage is obscene and growing rapidly, while ads
don't really fit their users usage patterns.

~~~
diego
They are making hundreds of millions of dollars with ads. What do you mean by
"ads don't really fit their users usage patterns"?

I hate ads as much as anyone, but they are working for Twitter. If you think
Twitter's executives don't know what they are doing, you underestimate them.

~~~
pytrin
According to this article, they made $140M in 2011 from ads. Of course, they
project to make 3 times as much by 2014, but that remains to be seen. I think
they can make much more by leveraging their API usage, which is larger than
all the other large tech companies.

[http://thenextweb.com/twitter/2012/01/31/twitters-
advertisin...](http://thenextweb.com/twitter/2012/01/31/twitters-advertising-
revenue-is-predicted-to-triple-by-2014-to-reach-540-million/)

Regarding ads, people consume twitter for opinions, networking and links to
content. They are rarely with purchase intent, as opposed to when they are
actively searching something on Google, for instance. Facebook are facing a
similar problem with their ads, but Facebook still has a much larger userbase
and the time spent on the site is much larger than with Twitter. Promoted
tweets are too obvious and often have a reverse effect on people who receive
it.

~~~
diego
You're preaching to the choir about intent. However, that article is old.
Twitter's ads are much more effective this year than last. Romney alone paid
$100k for _one_ promoted trend that lasted a few hours. I know first hand
they're making hundreds of millions this year.

The point is, you have no data to back your assertions about what's good for
Twitter as a business. They spent years refining their business model based on
their data, and they picked the one they have now.

~~~
pytrin
As far as I know, Twitter has yet to explore (in practice) monetizing their
API. Do you know anything about any experiments they've done in that space? it
seems to me like ads are just a default monetization strategy to those
companies

~~~
spullara
Search the Internet for 'twitter firehose license' and you can see for
yourself.

~~~
pytrin
Right, forgot about that completely. Their API usage did grow considerably
since then. I would love to find some data on what were the results for that
licensing experiment

