Twitter's One Real Problem. No Not Developers!
Photo of Twitter co-founder & CEO Ev Williams by Randy Stewart via Flickr. — A few days back, I stopped by at the brand-new Palo Alto, Calif. offices of Facebook. It is a gigantic open space, with desks lined up next to each other as far as the eye could see.
Context & Ripple Effects
Om Malik's column lands in the middle of a bruising week for Twitter's platform story: on April 11 the company was reported to have effectively wiped out other developer apps through acquisitions of clients built on its own API, prompting API lead Ryan Sarver to post a message to the developer Google group to calm fears — and on April 13 Twitter began showing ads to users for the first time. Malik's argument is that neither the developer revolt nor the ad debut is the real story.
The real story, he contends, sits across the Bay: after visiting Facebook's gigantic new open-space Palo Alto offices, he notes that brands have rushed there to amass fan bases in the millions, with analysis pegging the value of a single fan at $3.60 based on news-feed impressions. Twitter, by contrast, has scale and cultural cachet — Ev Williams had already framed journalists as curators of tweets back in October 2009 — but no equivalent monetizable unit for marketers to buy.
First-order effects
- Marketers choosing between platforms face a concrete asymmetry as of this week: a Facebook fan carries a published $3.60 impression value, while Twitter's ads only started appearing on April 13 and have no comparable brand-unit pricing yet.
- Third-party client developers, some of whom just watched Twitter acquire competing apps, get explicit reassurance from Ryan Sarver's Google Group post — even as Malik argues they were never the company's core problem.
Second-order effects
- Facebook's office expansion and its millions-strong brand fan bases put pressure on Twitter's brand-new ad product to win the same marketing budgets, turning monetization design — not feature competition — into the battleground between the two companies.
- Client developers building on Twitter's API must now weigh a platform whose owner absorbs popular third-party apps, making Sarver-style communications, not product commitments, the main trust mechanism.
Third-order effects
- If brand dollars follow measurable units like Facebook's $3.60-per-fan impressions, social platforms will be judged by monetization architecture rather than raw audience, forcing each to invent a purchasable brand object early in its life.
- A pattern of platform owners acquiring or outbuilding their own ecosystem's apps points toward consumer-social ecosystems consolidating around first-party clients, with developer relations managed as communications rather than guarantees.
The trend: In 2010's consumer-social race, the competitive fault line is shifting from developer ecosystems to monetizable brand units, with Facebook's fan economics setting the benchmark Twitter's first ads must answer.