Brij Singh's Blog

April 13, 2010

Twitter Makes 70000 Apps Happy! Except Maybe Bitly

Filed under: Entrepreneurship,Tech — Brij @ 7:20 am

It’s been a while since I put this little note on my blog. It was 2007 and the title was Why Twitter Matters?

Since then lot has happened. Now in real life Tiger Woods talks in 140 characters. Twitter has now close to 70000 third party applications, round about 100 million accounts (not all are users) and all along tech pundits had been screaming – show me the money!.

Twitter has something for those pundits today. Company is rolling out an advertisement system which relies on 9 unique parameters. Called Promotional Tweets, these 140 character ad units will be driven by resonance algorithm. This resonance score is sort of like 140 character equivalent of relevancy score. Click and link is replaced by click and retweet – plus some more. Promotional tweets are in the flow and it’s part of your attention UI (unlike the AdWord ads which show up mostly on the sidebar). More on Resonance algorithm from NYT:

Twitter will measure what it calls resonance, which takes into account nine factors, including the number of people who saw the post, the number of people who replied to it or passed it on to their followers, and the number of people who clicked on links.

If a post does not reach a certain resonance score, Twitter will no longer show it as a promoted post. That means that the company will not have to pay for it, and users will not see ads they do not find useful, Mr. Costolo said.

My emphasis on ‘number of people who clicked on links’ parameter. It’s too early to predict but designing key monetization algorithm on this parameter means that Twitter needs to control the input link. They need to own URL shortening service. This service will not only be required for the deep analytics but also for speedy real-time computation. Hard to think bit.ly providing rich meta data in the time scale in which Twitter usually thrives.

Tweaking and constant fine tuning around resonance algorithm will drive next set of acquisitions for Twitter. Bit.ly should be a prime candidate.

Also 3rd party apps will be most pleased with this development. Putting money in the stream makes real time stuff look real. Coming from Twitter this removes cheesiness – which is often associated with current generation of in-stream ads. This takes Twitter closer to apps-as-ad-unit model, it’s not very far fetched to think that one day Twitter will start showing small apps as Promoted Tweets. Imagine Starbucks coupon which you can print right from that promoted tweet – without visiting Starbucks website. Twitter is in a great position to leapfrog AdWords model by applying iAd technique here.

PS: Headline is purely for fun. Nothing against Bit.ly. We love their service and use it in our application.

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