Brij Singh’s Blog

Twitter acquired, one of my favorite Twitter Client, Tweetie. Congrats to Loren and Atebits. Loren did a remarkable job executing on the user experience. So now Twitter has a wonderful iPhone application. In a clear sign that mobile platform is important for them, they also announced Twitter for Blackberry.

Twitter is in the client business now. They are extending their core platform to leading mobile platforms. Not surprised that the developers are up in arms and they are crying foul that Twitter should have fixed their business model problem first instead of competing with them. Twitter has every right to go in this direction. They are still figuring out their business.

To me the interesting point is why now? Why is Twitter making these moves now. It’s not as if users have suddenly discovered new productivity with these clients. There is a big picture emerging around mobile platforms. That picture has elements of location based services (on that is based local advertisement market - which is very very significant. Remember Google/Yelp episode!). Platforms are colliding and this time revenue pipe will be tightly controlled by the entity which ends up having tight control on the platform.

Chris Dixon has a great post on this topic. Evolving platform without having a locked down business model is a risky move. Twitter can compare with Facebook to figure out new ways to make money but anymore comparison will just kill the main value. As he rightly said, Facebook can just sit back and enjoy the drama.

Twitter genius is that it works quietly in the background - in real time. Twitter’s social graph has amazing approachability. They need to figure out ways to make money from that unique experience. Extend that approachability and serendipity to all developers. Give Tweetie back to community as an open source SDK, add firehose access and ask all iPhone developers to build vertical apps with it. Wishful thinking? Maybe.

Giving away complete client side codebase - potentially with unique and standardized user experience like Tweetie - for iPhone, Android(coming soon?), Blackberry, Nokia and Windows7, they can give developers a new architecture for gaming, vertical apps, lbs apps and potentially enterprise apps.

Big question is what’s next for Twitter developers? Wait for the Chirp conference to throw light on Twitter’s long term business model or just stick to business as usual. I think there is one way developers can avoid future heartburn - by going vertical! Agree it’s boring and probably will require domain knowledge but definitely worth it. Pick a category like the way Stocktwits is doing with financial services. Morph your client into a best tool for field journalists, or for automotive sector, or for political event reporting or for social recruitment. Add all the great things which mobile platforms has to offer - LBS, Mapping, Notification and Social Sharing. Obvious advantage in this strategy is that developers will be required to work with their market.

I am sure smart developers are already making their next move. You just have to read Chris’s opening line from his blog post:

I can’t remember the last time the tech world was so interesting.

It’s incredible the amount of change we are seeing in mobile space. All the more amazing when you contrast this with the fact that we are still struggling to recover from Great Recession.

Update: Evolving dynamics around Twitter ecosystem will be under microscope for next couple of weeks. Mark Suster has interesting Salesforce reference:

And Salesforce did this more broadly in all of their key areas. Salesforce was very good at managing the 1-year roadmap so at any point in time we had a pretty good idea about what we would be developing and what we wouldn’t. We also knew what we wanted to build but wouldn’t be able to get to. Often these were things that would make Salesforce more competitive vis-a-vis Oracle and Microsoft. Salesforce was excellent at outlining to the developer community what they considered “core” and what white space they wanted filled. If they gave you the white space you knew you had a good period of time to build a business without being boxed out by Salesforce and you knew that Marc Benioff was likely to highlight you at a conference or with journalists. Importantly, all of this was done privately, as it should be.

Read his full post. It’s full of insights. Two thoughts come to mind

- Imagine how useful Ad.ly kind of services will be if they addressed specific verticals. Why wouldn’t your followers click on car tweet ads if automobile is all you tweet about!
- White space thing is tricky in mobile space as compared to enterprise space (Salesforce area - longer sales cycle = longer dev cycle). At this point nobody has any clue on the pace of white space discovery and white space harvesting as it applies to mobile space. It’s one big TBD.

 
In another example of how mobile-app-can-wreak-havoc-with-your-business-model, check the usage statistics of Facebook For iPhone.

There are 243,482 daily active users representing 45% of total. These are high numbers. It's fair to say that 243,482 iPhone owners are now using Facebook for their social networking experience.

Now compare the use % for applications which are higher on the leader board -

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High active user number for iPhone application has serious implications for several Facebook developers. Especially Social Media, Lookery . These distributed ad platforms need to come up with a model similar to PinchMedia.

Now iPhone users are affluent (or maybe crazy!), spend more time online, and fall into compelling demographics. Ideal for ad targeting. Challenge lies in developing a new ad serving model which can exist within the constraints of App Store. Eventually acceptable format will show up but in the meantime iPhone will further damage monetizability of social networks.

Also every  user access Facebook from iPhone means one less ad impression on Facebook.com. In Facebook case ad is served by Microsoft. We can generalize this reduction in ad impression across all mobile social network apps.  That cool and  'clean interface' constraint of iPhone app is a natural ad blocker.

Keep an eye on 'active user' count for mobile social networking apps.  It's a leading indicator of how disruptive mobile apps will be.

Update: Just to add important data point here. Erik Schonfeld, over at TechCrunch, reports that Lookery is lowering guaranteed CPM to 7.5 cents. As I pointed out yesterday that meta social network ad plays will have to adjust their business model. This sums up best:

Lookery is hoping all of those pennies will add up, but it isn’t counting on it. CEO Scott Rafer says the ad network is running at break even in terms of gross profits. But his plan is to use it to “bootstrap a data services business.”

In other words its back to basics now.

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