Twitter closes TweetDeck buy for $40 million?

Ronny Kerr · May 24, 2011 · Short URL:

This isn't the first time the popular third-party application has been reportedly bought...

It’s been a long, arduous road, but TweetDeck might have finally found a definitive buyer.

Twitter has acquired the third-party developer for more than $40 million in a combination of cash and stock, according to sources close to the deal (via CNN).

Neither the buyer nor seller has officially confirmed and both have declined to comment so far. For those who once thought that TweetDeck’s sale to UberMedia was final, a few months ago, it may be hard to swallow these new reports. That said, reports of Twitter turning the tables on UberMedia by offering up to $50 million, or $20 million more than UberMedia had reportedly offered, have been floating around for a few weeks now.

CNN points to a tweet sent out yesterday evening from Twitter Comms--”For all those who might be curious, we continue to not comment on rumors”--but it’s hardly a definitive answer.

This wouldn’t be the first time that Twitter snapped up a popular third-party client. A year ago, the company bought Atebits, the developers behind Tweetie, one of the most-used Twitter apps for iPhone. If you use Twitter for iPhone, you’re basically using an app developed by a third-party, purchased by Twitter, rebranded as “Twitter for iPhone” and published to the App Store as a free app.

Likely, TweetDeck would undergo a similar process, though it’s unclear how the application would be positioned against Twitter for Mac, an official client available as a free download from the Mac App Store.

Taking all of this in, and adding to it knowledge that Twitter aggressively snatched TweetDeck away from UberMedia, demonstrates how desperate the company has become about owning its microblogging experience. And, in the end, it clearly has a lot to do with money.

At the end of last year, when Twitter closed its $200 million round from Kleiner Perkins Caufield & Byers, I wrote that 2011 would be about honing in on revenue. There had been quite a bit of advertising experimentation in 2010, but when a company is valued as high as $3.7 billion, it’s about time to start proving why.

Twitter has quickly realized that, if it truly intends to monetize the site via advertising (or Promoted Products), then it needs to own all the service’s scattered eyes, from desktop browsers to mobile apps to mobile browsers to desktop apps. Sure, it hurts for third-party developers, but it’s clearly what’s best for Twitter.

We’ll be waiting on official confirmation from the company.

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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, 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, 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 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.