Analysis: Is Twitter building ad business at expense of innovation?

Wed Jul 11, 2012 4:15pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Gerry Shih

SAN FRANCISCO (Reuters) - Is Twitter a technology platform, a media company -- or both?

With Twitter's recent moves pointing toward "media company," there is a growing concern among technologists that a trend for greater content control will compromise both innovation and Twitter's future in favor of short-term profits.

The days of fledging start-up are gone for six-year-old Twitter, which is now a major player in the big battles shaping the future of the Internet. With over $1 billion in investment, it has backers looking for an IPO payday -- an environment that demands more than trumpeting a nifty communications protocol.

The most recent dust-up arose after a top executive announced in late June that the company would soon introduce "stricter guidelines" around how independent developers may build applications on top of Twitter. Around the same time, the social networking service LinkedIn disclosed that it no longer had permission to include Twitter streams.

Those moves are part of a larger clamp-down on how and where Twitter's content - the stream of Tweets - is viewed by users, who collectively publish 400 million Tweets daily. Twitter's monthly active users have steadily risen to over 140 million, although it lags far behind Facebook, which claims over 900 million.

Technologists want the service to remain an open, free-wheeling environment, where new applications can be built without restriction and innovation remains the main goal.

For Twitter, increasing control smooths the path to selling advertising and other money-making deals.

Greater control makes it easier for Twitter to sell advertising against its content -- the media industry's traditional proposition. It could also facilitate future initiatives in e-commerce, where Twitter could allow shoppers to click on deals within Tweets and take a cut of the revenue.   Continued...

Twitter's CEO Dick Costolo gestures during a conference at the Cannes Lions in Cannes June 20, 2012. Cannes Lions is the International Festival of creativity. REUTERS/Eric Gaillard