Is Twitter's business model staring it in the face?

The talk of a Twitter business model is still buzzing like bees around the hive. I think one option is as plain as the beak on the little bluebird's face. (Didn't realize I was going to be talking about the birds and the bees in the post. Heh.)

The option I speak of is a premium services model such as that currently used by Yammer, but one which offers features similar to that of a brand new application, wiggio.

In my pitch at OMMA Social I suggested that Twitter do one of two things:

1. Offer a premium subscription option for business and organizational use -or-
2. License part of their API for third-party use so services like Tweetdeck and Twhirl could do so.

I also suggested that the "secret sauce" in all of this be the ability to create groups in which everyone of the members could be messaged at the same time.

Well, guess what, that's exactly what wiggio was created to do! And it adds lots of extra bells and whistles as well that, according to MarketingVox, include such things as:

• Shared calendars
• Group text and voice messaging
• Free conference calling and web meetings
• Filesharing
• Collaborative viewing/editing for documents
• Polling capabilities
• and a list-serv!

To top it off, wiggio is free!

MarketingVox does say the app is designed for use by college students, but it doesn't appear to be restricted to that. In fact, it lists "small business" as one of the user groups. 

This wasn't intended to be a rave for wiggio (it's just that I'm playing with it while writing this post), but rather a query into why Twitter is letting these other companies steal its thunder.  (You can bet there will be more to come, too.)

I mean, think about it, Twitter has the userbase. They could kick Yammer's and wiggio's butt if they wanted to by providing similar services of their own.

Or...or... they could do "b" from above and let other companies such as these have access to the userbase via the API. Frankly, not being a programmer mind you, I don't know why Yammer and wiggio aren't already tapping into it. 

In fact, if you're a programmer, perhaps you could square me away on a few things:

• What restrictions does Twitter places on the use of its API?
• Is there any reason either Yammer or wiggio couldn't intergrate their services with Twitter now?
• Does Twitter forbid the use of its API if the third-party is monetizing their service?
• Is it a license issue more than a technical one?

Comments

[Ryan]

I can't find a Terms of Use for the Twitter API, so I'm not sure there are any legal issues against it. I also can't see any technical issues on why you wouldn't be able to do it. I would guess with Yammer that they see no reason to as they are trying position themselves as like a Twitter for internal use.

[John Flynn]

I agree with you that Twitter is going to need a "paid for" service. With the increase of Twitter the noise level is going to get very loud.

Plus the Social Media Gods (SMG) for the most part (except for you and a few others) have left us. They just come in and spam something and leave.

Coporations are now starting to see the benifit of Twitter (Dell selling one million dollars) and are slowing coming on board.

The strange thing is why Twitter turned down the half of BILLION dollars from Facebook.

What are they thinking. What is next?

[Don Draper]

* What restrictions does Twitter places on the use of its API?
Twitter throttles the use of the API via technical means. It's limited by user, so for a specific user/password combination there is a maximum of API calls you can make across all applications. They've also limited applications to 20K calls/day from an IP address. The way the API is set up, even a simple query such as find all followers of a user can require a few hundred API calls for someone with a large following. From the standpoint of an API programmer, though, there are no restrictions upon what you can do with it.

* Is there any reason either Yammer or wiggio couldn't intergrate their services with Twitter now?
Not really.

* Does Twitter forbid the use of its API if the third-party is monetizing their service?
No.

* Is it a license issue more than a technical one?
There's no license issue.

The problem with the paid account approach is that Twitter can't make enough money at it. The best estimate I've seen is that there are about 10,000 "power users" that get enough value out of twitter that they'd pay $20/month for the service -- the vast majority of users would not pay. That's a $2.4M/year business, which won't even cover the cost of their servers.

Charging for API access is an even worse proposition. There probably aren't 100 customers out there with applications that would justify paying an API fee. Can anyone name a Twitter application that is monetizing in a significant way? Now take a small slice of that and you've got Twitter's potential cut.

[Paul Chaney]

You raise an excellent point John (well, two, actually, one referring to me as an SMG...ha, ha). If Twitter has no discernable business model, why don't they take the money and run. That is, unless they're just very well funded and can hold out for an even bigger paycheck.

I'm telling you, I think Google buys them. As went Blogger, so goes Twitter.

[Paul Chaney]

Don, once again you come to my rescue with a sound explanation. What, then, is Twitter's business model? My friend Uwe suggested at OMMA Social the Vender Relationship Management model. Now, that I can see as having real possibilities. Vendors would line up to make deals with users and vice-versa, or so it would appear.

Now, to turn things around, if there are no API limitations, why don't Yammer and wiggio tap into the Twitter API? I mean, why completely recreate the wheel?

[Joe]

I've tried this Wiggio application and it is very functional. I am a systems analyst, where I develop custom applications for $40M specialty chemical manufacturer and we will be adopting Wiggio as our main collaboration space within a few months. There are some admin issues that I have addressed with the Wiggio team and they have assured me the developments to take the application aggressively into the small biz and non profits is part of the strategy. I don't think Twitter will be able to keep up!

[Paul Chaney]

That's my concern. If others capitalize on Twitter's lack of action, where does that leave them? However, the more I think about it, the more I believe Evan and Biz will come out with something that will leave us all a bit aghast.

[dominic]

Twitter is great because it's simple and I don't think wiggio would make it to the general public.

Also I think Twitter has options to monetize its user base. Just take the example (which I already shared on Marketing Profs)

I feel like there are more and more tinyurls in the tweets I receive. Without twitter the tinyurl service has very little value. Also tinurl has already 3M monthly, i.e > 50% of twitter.

Maybe an embedded version of tinyurl with highly targeted premium advertising would be a profitable option. You know who is building the url, its network and the content of the destination site. I can do much better than adwords ( current ads on tinyurl) on this :-)

There is still huge opportunities in relevance targeting without going into the (Facebook like) behavioral trap.

Twitter also has other similar opportunities by owning more of the info chain.

Best