Twitter grows up

Much has already been written about Twitter’s early history, including the origins of the 140 character limit (the same as a standard SMS) and how users created features we now take for granted, such as @replies and #hashtags.

That is all in the past now, as Twitter is making changes to how it operates in order to become what I call a ‘mass social media’ (MSM) platform. Advertising revenue will play an important role in its business model. We know this because Twitter’s new API rules for developers (the API is the thing that lets developers tap into the Twitter engine to create their own applications) have changed to emphasis business tools over consumers. Unfortunately, if you are ‘power user’ of Twitter, this may mean you eventually lose access to your favourite tool in the long run.

The hackers and early adopters of Twitter may not like these changes (one has gone as far as starting a crowd-funded competitor), but Twitter likely needs complete control over the consumer experience for two key reasons:

  1. To maintain the integrity of their advertising chain.
  2. To enable the development of new apps and services.

If you are a business, the more likely downside of these changes are that you may need to factor in paying more to engage with customers on Twitter. Firstly, Twitter wants to make more money from advertising – this has to come from business users and they are rolling out new services to help target ads more effectively. The second area is the cost of the apps and services used by business to engage. At this point twelve companies have been announced in Twitter’s new certified product program, which cover engagement, analytics and data. Naturally, certified products could demand a premium.

On the other hand, as Twitter becomes more consumer friendly through a standardised interface then the value of the ecosystem may create yet more opportunities for brands to engage with customers. If we look at Twitter’s history of acquisitions , the vast majority have been focused on services that support the core Twitter engine. However, Bagcheck, Fluther and Posterous are content services aimed at users. None of these services have been deeply integrated into Twitter at this stage, so there is potential to do more now that Twitter is exerting more control over the user interface. In fact, one obvious gap is that Twitter doesn’t actually own a specific photo-sharing app (although Posterous could help fill that role).

In fact, the main risk is less about what is being lost but rather Twitter’s ability to execute well on its strategy without losing influential users. Unlike Facebook, Twitter is a relatively simple platform for sharing 140 characters that may include links or rich media. But it doesn’t (yet) have apps or other engagement features built into the core Twitter experience. If Twitter is going to keep consumers engaged (and sponsors happy), it needs to now create a platform that is really engaging for the majority of its users – and this means competing against Facebook and even Google+ for that attention.