Twitter as Plumbing

Cue the jokes.

So, Chet (@oraclenerdfloated this notion, originally proposed in the NYT, and it’s completely true. Check the evidence: $25 million from Google and Microsoft to pump the firehose of tweets into search results, a full ecosystem built around the Twitter API, even an apps marketplace, Oneforty, built around the ecosystem.

Incidentally, Oneforty, the brainchild of Laura Fitton (@Pistachio), who covered OraTweet back in the day, recently raised some venture money and will be debuting its premium service next week.

So yeah, Twitter has become plumbing. I like the analogy because if Twitter gets clogged, then a lot of parties get, ahem, downstream, problems.

This is fun.

But check out “How Much Are Twitter’s Tweets Really Worth?” in BusinessWeek today for an interesting perspective.

Last year, Twitter’s 50 million users posted 8 billion tweets, according to research firm Synopsos, which means Google and Microsoft are paying roughly 3¢ for every 1,000 tweets. That’s a pittance in the world of online advertising. Top media sites often get $10 or $20 per thousand page views; even remnant inventory, leftover Web pages that get sold through ad networks, goes for 50¢ to $1 per thousand. The deals put “almost no value” on Twitter’s data, says Donnovan Andrews, vice-president of strategic development for the digital marketing agency Tribal Fusion.

OK, that really does add perspective.

In fact, it makes we wonder if the ecosystem might benefit more financially from tweets that Twitter actually does.

This is, of course, a tried and true business model for the Interwebs.

Look at Google. With Page Rank, they created a fast and accurate way to find information and took off from there. Google didn’t initially create content (or anything for that matter); they simply provided the plumbing.

Likewise, Twitter doesn’t create content, users do. Twitter, through its API, provides easy access to the content.

Unlike Google, Twitter’s path to this point was rife with uncertainty. Imagine hearing this pitched as a business plan in 2006. Way too much risk, which makes me assume a lot of Twitter’s success was happily accidental.

Twitter’s future isn’t assured either. I suppose, assuming continued growth, that they could negotiate higher prices for access, or use metadata, like geo-tagging, to up the asking price per tweet.

Facebook is a wildcard in the plumbing game (ah, the NSFW puns). Privacy concerns prevent them from turning on a firehose that would rival Twitter’s, but they seem determined to open up people’s News Feeds.

At a paltry $0.03 per update price, I doubt Facebook would care, but if the value rises, expect a battle over data ownership to ensue.

Thoughts you’d like to share? Sound off in the comments.

AboutJake

a.k.a.:jkuramot

11 comments

  1. Very useful clarification, thanks. Tough to quantify exactly, but that might significantly raise the $0.03 per thousand tweets figure. Although, to your point, they might see delivery as akin to a standard pageview.

  2. Thinking more on tweet value and your earlier post on APIs. The old-style media world (newspapers and TV) were the publishers and would control what went out. So a newspaper could say it had 30,000 readers (and even use survey responses to say how may read the sports or financial pages). Twitter doesn't control content (though it can suggest who you may want to read) and with APIs it can't even push ads to people through its web-pages.
    I guess the low value of tweets compared to pageviews can partly be put down to the fact you can't put ads on an API short of actually pushing tweets to people irrespective of whether the follow the tweeter.

  3. Twitter could push ads via twitter.com, which accounts for more than 50% of its usage. That's always been a looming threat. It's a bit funny too, since many people use their Twitter pages to advertise themselves and their services, mostly the social media experts. Another ecosystem, one that would be borked if Twitter pushed ads on twitter.com pages.

    Your point about the API is spot on though. I suspect if they go to ads on twitter.com, the API may go pay for use on a sliding scale essentially forcing the developers to pay the premium for ad-free content. That cost might end up falling into users' laps, although I doubt it would go over well.

    You never know though, just look at Tweetie.

  4. Excellent views and important information. as I have been looking at the world of the interactive web- I am finding that Twitter is the guts that ties it all together. Stringing Facebook to Linked In to an RSS feed is all done through Twitter. It is a very easy way to streamline the message.

  5. Yeah, now that FB and LinkedIn support posting to Twitter, it has become *the* central hub for status. Can you denormalize between FB and LinkedIn though, or do you have to post to each individually? I'm sure there are numerous services that will post to various sites, but if I remember correctly, LinkedIn's development is not as open as the others.

  6. I guess if you used Twitter as an imput source to wikipedia, then as someone denied and agree something in Twitter then essentially Wikipedia should rewrite itselfs based on these new facts. Addtionally Twitter would make a great input source for an AI application perhaps also adhered to Wikipedia and Britanica.

  7. You're giving Twitter an awful lot of credit 🙂 I've always like Twitter as a bot service, e.g. the washing machine account, the plants that tweet when they need water, the cat door, etc. These are real hacks that show how useful it is to have an open messaging platform. Maybe that's a gateway to your AI application.

  8. I guess if you used Twitter as an imput source to wikipedia, then as someone denied and agree something in Twitter then essentially Wikipedia should rewrite itselfs based on these new facts. Addtionally Twitter would make a great input source for an AI application perhaps also adhered to Wikipedia and Britanica.

  9. You're giving Twitter an awful lot of credit 🙂 I've always like Twitter as a bot service, e.g. the washing machine account, the plants that tweet when they need water, the cat door, etc. These are real hacks that show how useful it is to have an open messaging platform. Maybe that's a gateway to your AI application.

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