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Suggestion to Twitter: Here’s how you monetize without ruining your ecosystem (techfounder.net)
26 points by pytrin on Sept 1, 2012 | hide | past | favorite | 21 comments

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.

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.

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.

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

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.

Which in some sense is still wanting the money!

Glad to hear this was never a discussion. You should've just stated originally that you know exactly what twitter wants, and left it there.

Have you spoken with someone at Twitter about this? I have. If you haven't, there's nothing to discuss.

So you've specifically asked someone in a position to make those decisions at twitter, whether they'd considered taxing their API? and they told you explicitly "No, we want to cap API usage regardless if it can be a profitable channel or not"

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.

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.

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.

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

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.

In theory, i like the idea but I can't see paying for an API like a service would generate as much money for them in the long run as their current ads strategy. API Services tend to cap out at a certain rate so then you need to start offering unlimited packages, etc. Companies are not going to be paying millions of dollars for API services, I cant think of one example where this is remotely valid.

Have you thought about how Twitter would actually structure something like that? Twitter is monetizing FAR FAR better than any of these other small Twitter API clients. Something like Tweetdeck might have generated hundreds of thousands of dollars, but thats a joke compared to the kind of money Twitter is dealing with.

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.

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.


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.

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.

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

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

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

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