Monday, August 27, 2012

Wither Twitter?

Last week, Twitter decided to change its terms of service and generally do a brute-force kinda dirty overhaul of its third-party business operations. (That linked article is opinion, but it hits all the important facts.) For many, this seems to be the beginning of the end of Twitter. I'm not so sure it's that bad, but it does appear to be a signal that things, sadly, are going to change.

The business world is different now. Not even twenty years ago, if you wanted a large, nationwide, mass-scale company, you basically had to make stuff. Sure, there were consultancies such as insurance or accounting, but even then that required a massive staff and office space everywhere you wanted to do business.

The internet changed that, of course. You can run a multi-million dollar business from a basement and a room full of servers. Amazon famously changed the way retail does business--they still do "stuff" but it's all just warehouses, not huge retail stores full of trained staff--and nearly all successful online businesses since then have been variations on a theme. Industries don't have to be "stuff" anymore. Storefronts or B2B operations are no longer necessary.

Somewhere along the line, however, you have to make money, and a lot of new tech companies appear to forget that. Most social media sites, and traditional tech sites such as Yahoo, do not sell anything. There's no physical products. They make their money off of online advertising (chancy even during the best of times) data mining (surprisingly lucrative) and premium accounts (sketchy at best). When the only thing you're dealing with is information, you eventually have to convert that information into cash. And that's not always easy.

The problem with Twitter is that its selling point will also be its biggest hurdle. Twitter is simple and easy--you look at messages of 160 characters or less. That's it. It's packaged all nice and neat online and through their (admittedly shitty) online app, but beyond that there aren't any stupid farming games to gum up the works. Sure, they have some sponsored ads, but beyond that any additional changes would fundamentally alter what makes Twitter so appealing. By being the best, they've painted themselves into a corner for how to make a buck off of it. (The recent furor in the link above is how Twitter handles its third party applications, since any potential money-making decisions--namely, adding advertisements to your stream--could have been bypassed. Twitter is trying to make sure that doesn't happen.)

I find Twitter to be particularly useful. It seems shallow on the face of it--how can you cram any decent thought into 160 characters? Yet it's that exact size that makes it so useful. It provides a lot of important information very quickly without a lot of gratuitous verbosity. You aren't going to Twitter to read blog posts and analysis, you're reading it to get snippets of information. As long as that particular point is remembered, Twitter ends up being eminently more useful.

(As an aside, I've always wondered about the viability of a social network that you pay a yearly subscription for. On the base of it it seems absurd--the internet is free!--but I think there is a certain value of making sure the people who you have connected with have a stake in the quality of their online presence. When everyone is paying $20 bucks a year, they're not copying and pasting some BS their racist co-worker sent them. Or maybe they will, I don't know. But sometimes quality is better than quantity, and I think a case can be made.)

I'm not as pessimistic about Twitter as some are. I think we'll see some more data mining efforts (most likely transparent to us) and a lot more ads in our timeline. I doubt we'll get to a "premium" account status, but you never know. In the end, though, it's clear that their major success may also end up being their downfall.

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