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Twitter’s Future

by Jeffrey Mann  |  April 8, 2009  |  6 Comments

Last week saw fevered speculation about an impending acquisition of Twitter by Google, and just as much fervent debunking of those rumours. I don’t pretend to have any inside information, so I won’t comment on whether this will happen or not. We don’t like commenting on rumours anyway. But I do have some ideas about why such a move could make sense, and what it would mean if it does or does not happen.

image Up to now, Twitter has chosen not to put much effort into developing business models. Like Google did before it, Twitter is building out its platform and attracting users. With a fair amount of VC money in the bank, it can afford to take its time. Twitter does indeed have value, even if it is not what most people think it is. Premium user accounts aren’t the answer. That wouldn’t bring in much money, potentially alienate users and reduce traffic. That last risk is why Twitter shouldn’t go that route.

As I said in my last blog posting, Twitter’s value is in its content, not the client. The Twitterbase is growing by 6 million tweets per day. Twitter is attractive because it has built a service which attracts this much volume, creating a constantly growing, twitching, seething real time source of comments, news and opinions. Companies will be willing to pay for better access to this information for lots of reasons. Consumer products companies can track attitudes toward their brands and their competitors. Media groups can use it to track real time public opinion. Governments can use it to follow what citizens are doing and thinking. Access to this data and the services to analyse it is where Twitter’s business model lies.

Even though Twitter can build out a business model, I don’t necessarily think it should. This is a good time for Twitter to sell itself to somebody. Media hype is pretty high now, with celebrities regularly talking about how they tweet on talk shows instead of promoting their latest film. It is unlikely to get much more intense than it is now. While building a business is possible, it will be a long hard slog for Twitter to monetize its assets on its own.

image Google would be a good candidate. The culture and ambitions of the companies match. The Twitter founders sold Blogger to Google earlier and work on the same principles of build first, monetize later. An acquisition plays to Google’s strengths in terms of infrastructure and monetizing analysis of large amounts of data. Google knows how to run highly scalable applications, and make money doing it. Google is not the only company that would benefit from a tie-up with Twitter, but it certainly looks like a good candidate.

Other tie-ups between Google and Twitter short of an outright acquisition could make sense, but would be harder to sustain since Twitter already uses such open interfaces. it would be hard for Twitter to offer Google better access to its data than any of its other partners if Google is just another partner. That rich API has been instrumental in building the healthy ecosystem of clients and analysis services that make Twitter so much fun.

In the end, of course they will do what they think is best for their companies and shareholders. Judging by the lack of noise in the blogosphere, it looks now like “Twoogle” will not happen (but that might have changed by the time I post this).Either way, it will be fun to watch.

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Category: google-vendors  microblogging  social-software  twitter-vendors  

Tags: acquisitions  business-model  google  twitter  

Jeffrey Mann
Research VP
20 years with Gartner and META Group
30 years IT industry

Jeffrey Mann is a Research VP at Gartner, covering cloud office, collaboration and social software.

Thoughts on Twitter’s Future

  1. @michaelnic says:

    You make sense.
    I had no idea that blogger and twitter were developed by the same duo… Evan Williams and Biz Stone .. they also created Xanga Wow!

  2. tarun says:

    Google’s execution of social networks has been spotty at best. And their record with acquisitions is about the same.

    And closing up Twitter might be doable, but may not be. The real value is in semantically parsing tweets for actual meaning, something that might be a bit more possible than a general web search with a limited 140 character set, multiple tweets on the same topic from the same person, and @ replies.

    They need to either commit to a dynamic management of Twitter and not letting it atrophy for years until revealing a grand update – something more in the model of Gmail’s evolution than that of Google Analytics or Voice – or they should consider a lesser stake and just becoming the premier search provider for twitter. Then again, Twitter should really make the search more seamless with the site anyway and not have it set up like it is currently as a parallel site.

  3. […] Mann discusses why Twitter should not work hard to find a business model One of his key points is that Twitter’s value is in its content. He like many others focus on the […]

  4. Roy Rivers says:

    Sounds like you want Google to buy out twitter – invested interest?- sound like it to me – Twitter, although a tool – it is not useful. Even the next “copycat” version WITH advancements won’t be useful either. Twitter is a waste of time! There is no business opportunties with it (advertising), which in the end will kill it. It will never go away, per say, but classified it as netscape! (period)

  5. […] Twitter’s Future – view page – cached ← The Social Media MacGuffin: A Volume-based Business Model for Twitter Non-Blog Post on Twitter, @aplusk, etc. → — From the page […]

  6. zeck645 says:

    I think its imperative that twitter allows direct privet contact to the people that let them be followed on twitter.Where are we going on twitter?Are we hurting are self in this new way of thinking?Still don’t quit understand reply methods.Maybe, we are all better off in the good days of E-MAIL.Its a good way to communicate but to many mistakes do to poor typing mistakes,to stringy!

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