What has Twitter become?
At O'Reilly, we've long believed that one criterion for long-term success is creating more value than you capture. When you do so, you create the possibility for an ecosystem that's larger than you are. You create a healthy environment in which you, your partners, and even your competitors can thrive.
Context & Ripple Effects
O'Reilly has been tracking Twitter since its earliest days — home automation experiments on the service in 2007 and the 2008 case for Twitter as a semantic-web data gold mine both treated the network as infrastructure others would build on. James Governor's 2007 line that markets are conversations made the same bet: the value sits in the ecosystem around the stream, not the stream itself.
That framing is exactly what Tim O'Reilly now tests against the company's own conduct this month: on March 12 Twitter imposed mandatory terms of service on all third-party developers, and on March 13 told developers not to build new Twitter clients at all. Critics called it bulldozing the app ecosystem during what is already being dubbed the 2011 Twitter wars. O'Reilly's criterion — create more value than you capture — is aimed squarely at that pivot.
First-order effects
- Third-party Twitter client developers are immediately constrained: the March 12 mandatory terms plus the March 13 directive against new clients shrink the space they were built to occupy.
- Developers already operating inside the ecosystem face renewed uncertainty about which categories of app remain welcome under terms Twitter can revise unilaterally.
Second-order effects
- Developer attention and investment start migrating toward platforms whose terms are more predictable, strengthening rivals' ecosystems at Twitter's expense.
- The episode forces every platform with a developer layer to price its openness explicitly — partners now have to weigh API dependence against the risk of a terms change.
Third-order effects
- If the pattern holds, maturing consumer platforms systematically convert open ecosystems into controlled channels once network effects lock in users — the value-creation phase funds a value-capture phase, and O'Reilly's test becomes the standard critics apply.
- The credibility cost lands asymmetrically: the same week Twitter demonstrated its irreplaceability during Japan's post-earthquake network jams on March 11, it also demonstrated that indispensability lets it constrain partners — a structural lesson about platform power regulators and developers alike will draw on.
The trend: Consumer internet platforms are shifting from courting developer ecosystems to constraining them as they scale, turning 'create more value than you capture' from an aspiration into the benchmark by which platform governance gets judged.