How Twitter raises red flags with its "truckload of money"

If you were watching a movie and Mark Wahlberg said he had a “truckload of money in the bank,” several scenes later he would probably be robbing that bank. So when Twitter CEO Dick Costolo said exactly that in an interview with the LA Times yesterday, our minds are left to wonder what he is foreshadowing.

In all likelihood, it’s a continuation of the API wrangling that led Twitter to end their partnership with LinkedIn last week.

Today, Twitter released its new iOS and Android app, which replicate the website’s features pretty faithfully while additionally allowing users to receive push notifications of other user’s tweets. Mike Isaac at All Things D wrote a great post detailing how the app may may be a precursor to paring down API access, and he makes a pretty compelling argument about Twitter’s intentions. The app is pretty slick (I actually had to add it to my phone to test it out, which shows how dependent I am on Tweetlist and other third party apps). I can’t say exactly why, but I just like Tweetlist (and TweetCaster) more.

So why is a company with a truckload of money and “no intention to go public” intent to change the way people are interacting with their platform? My guess is that they want to go public (or sell). But thanks to Facebook’s IPO, one of the expectations that investors will have is for Twitter to show that they can make money through advertising. By restricting API access, Twitter is trying to channel users back to their organic sites where they can see ad impressions. Add to that the revelation that Twitter is tracking external website usage within the “Twitter ecosystem” (which by their definition encompasses most websites), and a picture emerges of a company trying to show that they can be profitable by making some hard and potentially painful decisions.

It will be interesting to see how they implement this. Developers are understandably upset at the changes, but users accustomed to accessing Twitter from third party apps are going to be the ultimate jurists for Twitter’s moves. Twitter is in a unique position from Facebook in that Google Plus (with a few tweaks) could have all of the features that Twitter has and could easily become an alternative (of course their API is more restrictive than Twitter’s).

As a thought experiment imagine Twitter cuts off Hootsuite from their API. What if Google set up a mechanism where you can keep your Twitter alias on Google Plus (since G Plus profiles are a number, assume this would be pretty easy association to make) and then partnered with Hootsuite to verify new accounts? Since Hootsuite is one of the five vendors with read / write access to G Plus already, Google could make a huge play for Twitter’s audience. I don’t think any platform is bold enough to do that, but Google did do the brilliant “email intervention” campaign, and may be desperate enough to prey.

Point being, Twitter runs the risk of disenfranchising users who have a (somewhat) viable alternative. It’s unfortunate that they don’t heed the advice of Nova Spivack and look for alternative ways to monetize (he suggests Twitter could develop an Adsense-type of service that would have to be included for any site wanting to use their API). Depending on how broadly Twitter restricts access, they will change the user experience of many. The impact of that will depend upon how much face they lose with the loss-averse, and how viable users find Google Plus (or something else) to be an alternative.

In any case, it’s kind of a bummer that Dick Costolo isn’t Mark Wahlberg, because it might be more entertaining to watch the drama…. and there would be a greater likelihood for a happy ending.

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Jim Dougherty

Writer and chief of miscellany at leaderswest.com

I aspire to give people something to think about rather than tell them what to do. My favorite Google Alert is “social media research,” I am increasingly compelled by Gen Z, and I appreciate good writers agnostic of where they write. At one time I was Kred’s 12th most influential social media blogger and Klout’s most influential person on the topic of David Hasselhoff. Transplant from Seattle living in Cincinnati. Haven’t entirely adopted the local sports teams yet.