There are lots of ways that Twitter could monetize its still-growing user base, but more and more it seems that their only interest has been to monetize via advertising—at the cost of forcing everyone to fit in with their advertising-focused model. This has upset the early adopters and, especially, third parties that all have made Twitter what it is today, more so than Twitter itself.

App.net (ADN) is the manifestation of a widely-shared sentiment that Twitter had the potential to be more than an ad service for Justin Bieber fans. Will Twitter’s ongoing refusal to cater to power users’ needs drive people to ADN? What are the long-term implications for Twitter given that it seems to focus 100% on advertisers as customers, rather than users?

It's frustrating to me, because the moves Twitter is making are rational from a business standpoint, but piss all over the community and work done by non-compensating stakeholders who rely on the service. I feel like those folks in the SNL sketch about Dr. Pepper who volunteer their time for the company because they are Peppers.

Twitter could have provided tools to serve the relatively small audience segment of people who use Twitter for conversation and collaboration without devoting too much focus. As just one idea, they could have imposed a $25/year fee to use third-party posting apps starting in six months in order to offset the costs involved in supporting such apps and the offset from ad revenue.

Yep but think how many management changes these folks have gone through. Sure, we brought Twitter to the mainstream but that's where our usefulness ends. It's a little like Apple no longer focuses on the Macheads because the 100,000,000 are better than the 10,000. It's the reality. Sure there are other business models they could have pursued. It's why I spent my own $$$ on ADN and supported the app development because I want to have a place that I can communicate with others and not be constrained.

The saddest part is that it doesn't have to be an either or. If you look at Twitter's history, a large portion of its innovation came from its users and third-party developers.

@replies, hashtags, RT, the idea of a mobile client or desktop client all came from users and developers. In this way, I think it would be OK if Twitter imposed some guidelines on displaying ads and other data in clients, but to totally try to kill that market? Ludicrous.

I still think where Twitter is most missing the mark is by cutting off access to its social graph. In doing that, they are basically ceding that market to Facebook.

What sucks about this is that that is something they could charge developers to access. And that access would be worth the money. But the social graph is one of Twitter's most valuable assets and by restricting it from Facebook, Instagram, etc., they inherently lower its value because its value is most applicable when used in situations that aren't confined to Twitter's ecosystem.

arguably all the innovation and details that made Twitter worth using for more than sharing my lunch menu came from users. But this isn't a surprise, the writing was on the wall two years ago when they declared war on 3rd party apps. It just keeps getting worse. As we're not going to change Twitter I suspect most of us will eventually move on as we did from other services. This one will be harder to replicate so there's a center of gravity. The irony is I care less about a mass of followers as opposed to the people I follow and who follow me back that I engage with on a daily basis. Twitter is counting that can't be replicated. It seems we're all doubling down a bit :)

In many conversations with Twitter they've made it clear, they don't want this be a social network, they want it to be a consumption channel for their partners to broadcast to the masses. It's one way to go but I think it's the wrong one, it's just the low hanging fruit that they couldn't resist

You're absolutely right that Twitter won't be easily replaced because it's become such a center of gravity, but my real hope for App.net is that it can be more than a Twitter clone and more of a new kind of transport for sharing data to different places.

For many reasons, I think that App.net has a much higher chance of success than Tent.is (though admittedly both are going to have to fight to keep and retain users), but I see its real potential as being more than just Twitter.

I couldn’t agree more with Christina’s belief that “it doesn't have to be an either/or” solution for Twitter. Also, that they’re making a big mistake closing their social graph for advertisers’ use only, rather than having it open to anyone via a paid API.

Twitter seems to want people to “build value-adding services” on top of Twitter, but forgets that they need to let people build whatever they are passionate about on top of Twitter for that to be an appealing proposition to many developers. Plenty of people think Klout is interesting, but I (and many others) think it’s slimy douchebaggery. Why would you *only* want something like Klout as your ecosystem players?

Michael wrote:
> “it's just the low hanging fruit that they couldn't resist.”

I think it’s not just about being unable to resist it, but being pressured by investors to go that way. This is why I’m so disinterested in jumping through hoops for VCs and investors to get some funding, and strangely (to me) that seems to be a very minority point of view.

Twitter got millions from investors, who all want a big return on it precisely _because_ Twitter is now this huge success. It wouldn’t surprise me if they are a big driver behind Twitter’s decisions of the past two years.

Does ADN (or Tent) need to survive to damage Twitter?

I think we all hope ADN does well and that's why we've all invested in it but I think that at worst ADN will still become the catalyst that opens up the market and loosened Twitter's grip.

I agree that Twitter's success has come from its 3rd party apps (once driving some ~90% of posts?) As those still-independent developers disembark for whatever reason and bring their UX expertise to other platforms (NetBot today for example) then over time users will begin to be able to use different channels without particularly knowing or caring about the underlying transport much like cellphone networks are today.

Twitter's fierce focus on adds & surveys may turn it into the commodity it fears.

Oh, and tent.is is so bafflingly poorly communicated that I still have no clue why it exists. I mean, I “get” why—because I’m a pretty savvy power user—but putting my industry insights aside for just a second to try and understand Tent.is from a user’s perspective and I just get immediately lost. I think Never Mrgan said it best:

“tent.is makes app.net's original pitch seem crystal clear and incredibly compelling. What is this I don't even seriously”

Yeah.

Twitter decided not to monetize itself as a dull communication channel, but that decision led it to become exactly that.

Jim, the availability of ADN as a potential option for those of us who don't want to be viewed as product has, I think, about zero effect on Twitter's business plan or ability to execute it. The new Twitter is a tool for people to have conversations about brands, whether the brands are celebrities, sports teams or stars, actual product brands, or media.

Twitter could lose the 500,000 people who talk mostly among themselves (like us) without any impact on the rest of the ecosystem. In fact, that's why they're willing to make these third-party app changes and impose other rules (like only allowing tweets to be linked in a special way, even if you wrote the tweet).

On the flip side, 500,000 people at $36/year is a very sustainable biz.

Well, $18M/year doesn’t even come close to covering Twitter’s payroll, let alone its other business costs, but as a supplementary revenue stream it sure wouldn’t hurt. The lack of a total loss of goodwill from influential power users would be worth it even if it _cost_ them money.

Faruk, I'm saying that for ADN, founded with the premise of a small, dedicated audience that pays, $18m/year is perfectly decent. Their business interests are aligned with ours as users, and a more valuable ecosystem of software and services can be leveraged on top.

For Twitter, it's a rounding error. But they are no longer interested in users as people.

Glenn, I think time will tell that you were right about ADN's future specifically but do you agree that its existence is fuelling a drive and enthusiasm from developers big and small to develop ideas away from Twitter; be that solving the problems of communicating cross-platform, new ideas akin to RT, @mentions, better subject-based "conversations" like this one or something we've not considered?

So even without surviving ADN (and Twitter's need to satisfy it's vast investment as Faruk points out) will erode Twitter's near-monopoly.

As that happens we may well see brands shift or diversify their communications because ultimately they only care about being where there audience is and not about the platform.

Also watch ADN prices drop as they scale. I believe goal is to get to $10 a year at which point there's a critical mass to be had. A lot of this will be timing and execution.

Of course if brands and Kardashians discover ADN if Twitter is no longer viewed as a viable medium god help us all.

Glenn: oh, right, for ADN it’s totally decent. And yes, Twitter doesn’t seem to care about users as people anymore, and that is perhaps the best, most concise encapsulation of what is wrong with them.

Thanks for adding me, Faruk. Great thread so far.

I think Christina pointed right at the big mistake Twitter made (see link). It's hard to construe the overall choices as a mistake, because, as others have said, it's rational. But locking off the connections we've made on Twitter to other critical networks, like Tumblr and Instagram, that's going to backfire.

Did y'all see the Comscore numbers from the other day? I'm not sure I buy them altogether, but it sounds like Instagram is actually overtaking Twitter in some measures of mobile interest. If Twitter's new, rich-yet-bland content isn't as interesting to people, AND their network is closed off, they're frozen, aren't they?

Jim: Yes, absolutely. Developers may be wasting their time with ADN if it fails, but they are being told explicitly and with some contractual language for users and developers that they are cherished and will be nurtured. (Long term, only actions, not words, can live up to that.)

I know where I'd be putting effort if I had to choose between Twitter and ADN: an audience of over 100m in which there's no room for new popular client software, or an audience of 20,000 that's growing rapidly in which there could be room for a number of solid packages with different approaches and revenue models.

Michael: Yes, I see $10 to $15 (as a yearly paid-in-advance price) as the ultimate destination when they've scaled up far enough and are ready to go much further.

The other part we can't ignore is that I believe ADN could become a computer-to-computer or mobile-to-server messaging back-end that gets used generically. If one has a single ADN membership, you could tap into that for all sorts of things. Or buy each server a unique account and use that with software that can notify people or talk among other machines.

While there are lots of server-to-server/client-to-server mechanism out there, a lot require that the IT people develop the robust messaging infrastructure even if they're using a library to make the actual communication take place.

Michael: Can the Biebers and Lady Gagas use ADN as a megaphone if the mass audience of receptive listeners isn't here?

Glen: Yes, it's interesting that today we've all been told that ADN will actually revenue-share with it's most "popular" apps. That in of itself is both a pretty strong incentive and a pretty strong message.

blog.app.net

Michael: Thank heavens that ADN have already started developing out a "Mute" feature.

Glenn: That whole generic messaging server thing is what I think will be really valuable and that has the most potential.

As far as reaching mass userbase, I don't think that has to be the goal for the service to be financially stable and useful for its audience. Look at LiveJournal (before Six Apart ruined it and sold it to the Russians who also ruined it), it was a self-sustaining ecosystem of millions of users that was Tumblr before it was Tumblr and its basis of membership in the early years was via paid accounts.

I would never argue that LJ could have been what WordPress.com or Blogger is, but the fact is, it was sustainable place with a few big names but lots and lots of regular people. That has value.

For me the bigger story I see with ADN is how rapidly and quickly its app ecosystem has grown.

Within a week, I had three different Mac apps and was beta testing an iPhone app. Now there are dozens of mobile clients, dozens of desktop clients and new feature are being added to the API and service every day.

This is exciting because it's the first time, since Twitter, that I can recall developer interest being that sustained.

Ultimately, that might not make ADN "kill Twitter" -- or turn it into the next Twitter -- but that's the kind of thing that shows that the potential.

If ADN could harness off of that excellent developer interest and turn it to things beyond app clients, we might really have something that pushes social forward.

Christina: Yes, absolutely, developers are clearly dying to do interesting projects. It's also clear that having much fewer limits on API use makes it a simpler task to write software.

I firmly believe ADN benefits from Twitter and Facebook and others existing, because it can be the dedicated alternative. "God, I hate the spam on Twitter and stupid responses and the choices I have for how to use." "Try ADN!"

I've been speculating about what it would take to get an App.net client to the point where it could subsidize its users' membership fees, maybe even entirely. I'm not sure there's anything stopping them from generating revenue from users in other ways (including ads?), thus making App.net membership effectively free through that client. Is that insane of me to contemplate?

Jon: Yes, I asked Dalton about this the first time I spoke with him. Seems totally possible. I can imagine ADN selling "wholesale" memberships to firms b/c of lower cost of collecting money and administering.

COOL.

I want to get back to Twitter, though. They're becoming an Old Media company, and I just wonder whether the audience they expect is there. Clearly, they know things we don't know, but I just cannot imagine people scrolling through homogenous little tweets and expanding them to watch videos or listen to songs while they stare at cover art.

Jon: I'm with you, but I think Michael's point earlier was true, the customer is the advertisers, not the users.

I do, however, feel that the more they focus on information consumption, the more they risk alienating the people the create that content worth consuming.

Twitter would be happy if it were HBO + TMZ.

Right, and that alienation part is already happening. But it also just feels like they're winding up for a big belly flop in front of their advertisers, too. This kind of presentation sounds BORING, and it sounds SLOW, which go hand in hand, and it's totally antithetical to Twitter. They're going to lose their customers quickly if the eyeballs glaze over.

I dunno, Jon. I think the vast majority of users on Twitter just tune in and turn out and occasionally post something misspelled about a trending topic.

Sounds horribly elitist. But it's really just power-law curve. Analyses I've seen are that a vanishingly small number of Twitter users post anything at all, and those that do tend to post very little. With Twitter celebs having 15,000,000-plus followers, and Twitter promoting following such accounts, the tens of millions of recent Twitter users see themselves as followers.

Well, yeah, I've long since accepted that. But they're consuming things from a firehose of 140-character tweets, right? That's what trending topics are. So if those things become links to all this in-line, rich media stuff, that slows people down. I think they tune out when that happens.

Glenn, most folks consume not create even 140 chars at a time. We even have a name for them "consumers"

They have consumption. Incurable except with creativity.

I think this gets us to the (hor)crux of the matter, for Twitter: if 99% of its users don’t create or create much at all, and only consume, then they really are just eyeballs to be monetized via advertising, because there’s no way Twitter could sustainably convince enough of them to start paying for it. And while Twitter may have democratized the people’s collective stream of consciousness, democracy was never a business model. Taxation is, but Twitter couldn’t get away with “taxing” its consumer users.

But in Twitter’s case, catering to the 99% seems like a rational decision only if you ignore its history and how they got here in the first place. Theirs is a 1% not to be ignored.

I feel like Twitter has a borderline contempt for its users. I don't even think they're doing this for the '99%' - who does this benefit? Who gets more out of embedded tweets, 'consistent' streams, other than Twitter? Viewers certainly don't. It's like saying "nah man you can't read this newspaper in that light."

Thanks Faruk.

Twitter is definitely playing the percentage game.

Embedded media, Twitter cards, expanded tweets all contribute as the service morphs. I have even jokingly suggested that promoted tweets might be auto-expanded in future - the latest version of #discover with all expanded tweets suggests we may be heading in that direction.

Twitter embraces the "consumers" by making it easier to find content. This is why I feel that discovery could take precedence over the feed in future with the #discover tab becoming the default view - perhaps the consumers may finally be persuaded to "comment" on the news they consume.

Twitter is no longer the same service but the masses don't care where it came from, they just want a free fix.

Social media is just a new take on advertising. At the end of the day, virtually all companies are looking at how can we get in front of more eyeballs and paying for advertisements online (be it a promoted tweet, sponsored post, sponsored blog entry etc) is the game. A free service has to figure out a way to make money at the end of the day. Even NetZero had to run ads.