November 16, 2010
Williams: A million ways to Twitter revenue
Former Twitter CEO and current head of product concludes Web 2.0 Summit, talks revenue, development
While Facebook’s Mark Zuckerberg had the honor of closing Web 2.0 Summit’s second day, Evan Williams, former CEO and now head of product at Twitter, just concluded the entire event in an on-stage conversation with John Battelle, founder of Federated Media Publishing.
Williams spared no time talking up Twitter's current experiment in securing a monetization model, the Promoted Suite (Promoted Trends, Promoted Tweets and Promoted Users). He’s “pleasantly surprised” with the success of the suite. Promoted Trends, for example, increases engagement and conversation three to six times. But the Promoted Suite is hardly the end.
“There are a million ways to make money with Twitter,” he said.
Everyone else might be wondering how Twitter will make money, but none of its executives seem very concerned.
Battelle pressed Williams about strategic moves made by Twitter in the past year that put a lot of developers out of business. Twitter started out as a bare bones project with an open API, which at first appeared to be a rich niche for third-party entrepreneurs to build cool features on top of. That is, until Twitter decided to just implement those cool features itself. The luckiest ones, like Tweetie, got bought by Twitter and rebranded as an offical “Twitter” app. All the rest had to deal with the prospect of an inevitably unfruitful scenario like having an app on the App Store called “TweetDeck” competing with an official one called “Twitter.”
Zuckerberg yesterday said developers creating content, specifically, on the Facebook platform have little fear of being overtaken by official features. Williams had no analogous theme to offer.
“Are photos safe?” asked Battelle.
“I don’t know,” Williams replied. “We think we need to create a better photo experience, but we haven't exactly determined what that is.”
Asked about a potential upcoming funding round led by Facebook, Groupon and Zynga investor DST, Williams was about as talkative as CEO Yuri Wilner was yesterday, but he did speak to Twitter’s current financial status:
“We have a lot of money in the bank.”
All the silence from Williams and Wilner seems very suspicious, but the truth is that no sources have confirmed any deal between the two.
When asked about Twitter’s upcoming new features or product launches, Williams’ hesitance again appeared to betray that something big could be on the way, but he didn’t reveal too much. He acknowledged what nearly everyone already knows--that there is too much noise on the site--and said that relevance is a “big theme” going forward.
“We never measure time spent on the site. We optimize for return on attention.”
Could Twitter be cooking up a brilliant algorithm for showing users the tweets most relevant to them? After all, Facebook already works behind the scenes to ensure that the News Feed only displays posts and photos from the most important friends. But, on the other hand, Twitter can’t so easily just snip posts from a user’s stream. It’s an interesting topic and one we’ll undoubtedly see Twitter address many times in the future.
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What is Twitter?
Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Where did the idea for Twitter come from?
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
How is Twitter built?
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
How do you make money from Twitter?
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.
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November 16, 2010