Business Review Model: twitter

Showing posts with label twitter. Show all posts

Thursday, November 18, 2010

Evan Williams on the Business Model of Twitter

A very interesting conversation with Evan Williams, co-founder Twitter, on how they are trying different revenue models. “There’s a million ways to make money with Twitter... We’ll probably try a few more... We're surprised it's doing better than expected.”

Friday, November 20, 2009

Videos from Real-Time CrunchUp SF

Real-time streams will fundamentally alter the way we communicate and interact with one another. At the Real-Time CrunchUp, held in San Francisco November 20th, some of the leading companies shared their views on real-time services and business models around that.

From RSS To Realtime:

A Conversation With Twitter COO Dick Costolo

Roundtable:

Filtering The Stream. Getting Rid of the Noise.

Chris Cox, VP of Product, Facebook
Amit Singhal, Google Fellow, Google
Loic Le Meur, CEO, Seesmic
Edo Segal, Investor/entrepreneur, Futurity Ventures,
Ken Moss, CEO, CrowdEye
Lili Cheng, GM of FUSE Labs, Microsoft
Bret Taylor, VP of Platform, Facebook,
Jason Hirschhorn, Chief Product Officer, MySpace
Jason Shellen, CEO, Thing Labs/Brizzly
Kimbal Musk, CEO, OneRiot
Ron Conway, Angel Investor

The Social Enterprise:

A Conversation With Salesforce CEO Marc Benioff

Where is The Stream Going?

Tomorrow's Killer Apps (DEMOS) Part 1

Justin Shaffer, Hot Potato
Loic Le Meur, Seesmic
Zachary Garbow, Qwisk
Rohit Khare & Salim Ismail, Knx.to
Evan Prodromou, StatusNet

Where is The Stream Going?

Tomorrow's Killer Apps (DEMOS) Part 2

Where Is The Stream Going?

Tomorrow’s Killer Apps (Demos) Part 3

Media Streams:

Are These The Ultimate Marketing Vehicles?

Ryan Amos, co-founder, DailyBooth
Sean Rad, CEO, Ad.ly
Jesse Engle, CEO, CoTweet
Robin Bechtel, Hollywood agent, Digital strategist for Britney Spears, Warner Bros. Records
Philip Nelson, SVP strategic development, NewTek

Geo Streams:

We Know Where You Are, Right Now

Where The Realtime Rubber Meets The Road:

When Does The Serious Money Come In?

Relevant videos:

Relevant posts:

Twitter reveals details about its business model

In this very interesting conversation with Dick Costolo, COO at Twitter, at the Real-Time CrunchUp Nov 20th, the company's business model is discussed, confirming that the deals with Microsoft and Google are bringing Twitter money. Costolo also answers questions about the newly turned-on Geolocation API and its possibilities.

Relating posts:

Relating videos:

Thursday, November 19, 2009

The business model of API’s

This is a guest post by Elias Bizannes, an expert in data portability and open standards, financial analyst at Vast.com and vice-chair of steering group at the Data Portability Project.

Application Programming Interfaces - better known in the technology industry as API's - have come out as one of the most significant innovations in information technology. What at first appears a geeky technical technique for developers to play with, is now evolving into something that will underpin our very society (assuming you accept information has, is, and will be the the crux of our society). This post explores the API and what it means for business.

What is it?

In very simple terms, an API is a set of instructions a service declares, that outsiders can use to interact with it. Google Maps has one of the most popular API's on the Internet and provides a good example of their power. Google hosts terabytes of data relating to its mapping technology, and it allows developers not affiliated with Google to build applications on top of Google's. For example, thousands of websites like the NYTimes.com have integrated Google's technology to enhance their own.

An example more familiar with ordinary consumers would be Facebook applications. Facebook allows developers through an API to create 'apps' that have become one of the main sources of entertainment on Facebook, the world's most popular social networking site. Facebook's API determines how developers can build apps that interact with Facebook and what commands they need to specify in order to pull out people's data stored in Facebook. It's a bit like a McDonald's franchise - you are allowed to use McDonald's branding, equipment and supplies, so long as you follow the rules in being a franchisee.

API's have become the centre of the mashup culture permeating the web. Different websites can interact with each other - using each others technology and data - to create innovative products.

What incentive do companies have in releasing an API?

That's the interesting question that I want to explore here. It's still early days in the world of API's, and a lot of companies seem to offer them for free - which seems counter-intuitive. But on closer inspection, it might not. Free or not, web businesses can create opportunity.

Free doesn't mean losing

An API that's free has the ability to generate real economic value for a new web service. For example, Search Engine Optimisation (SEO) has become a very real factor in business success now. Becoming the top result for the major search engines generates free marketing for new and established businesses.

In order for companies to boost their SEO rankings, one of the things they need to do is have a lot of other websites pointing links at them. And therein flags the value of an open API. By allowing other people to interact with your service and requiring some sort of attribution, it enables a business to boost their SEO dramatically.

Scarcity is how you generate value

One of the fundamental laws of economics, is that to create value, you need something to be scarce. (That's why cash is tightly controlled by governments.) Twitter, the world's most popular micro-blogging service, is famous for the applications that have been built on their API (with over 11,000 apps registered). And earlier this year, they really got some people's knickers in a knot when they decided to limit usage of the API.

Which is my eyes was sheer brilliance by the team at Twitter.

By making their API free, they've had hundreds of businesses build on top of it. Once popular, they could never just shut the API off and start charging access for it - but by introducing some scarcity, they've done two very important things: they are managing expectations for the future ability to charge additional access to the API and secondly, they are creating the ability to generate a market.

The first point is better known in the industry as the Freemium model. Its become one of the most popular and innovative revenue models in the last decade on the Internet. One where it's free for people to use a service, but they need to pay for the premium features. Companies get you hooked on the free stuff, and then make you want the upgrade.

The second point I raised about Twitter creating a market, is because they created an opportunity similar to the mass media approach. If an application dependent on the API needs better access to the data, they will need to pay for that access. Or why not pay someone else for the results they want?

Imagine several Twitter applications that every day calculate a metric - that eats their daily quota like no tomorrow - but given it's a repetitive standard task, doesn't require everyone having to do it. If the one application of say a dozen could generate the results, they could then sell it to the other 11 companies that want the same output. Or perhaps, Twitter could monitor applications generating the same requests and sell the results in bulk.

That's the mass media model: write once, distribute to many. And sure, developers can use up their credits within the limit...or they can instead pay $x per day to get the equivalent information pre-mapped out. By limiting the API, you create an economy based on requests (where value comes through scarcity) - either pay a premium API which gives high-end shops more flexibility or pay for shortcuts to pre-generated information.

API's are part of the information value chain

An economic concept I proposed a year ago (and am going to revise over the coming year with some fresh thought) is called the Information Value Chain. It takes an established economic theory that has dictated business in the industrial age, and applies it in the context of businesses that create products in information or computing utility.

With reference to my model, the API offers the ability for a company to specialise at one stage of the value chain. The processing of data can be a very intensive task, and require computational resources or raw human effort (like a librarian's taxonomy skills). Once this data is processed, a company can sell that output to other companies, who will generate information and knowledge that they in turn can sell.

I think this is one of the most promising opportunities for the newspaper industry. The New York Times last year announced a set of API's (their first one being campaign finance data), that allows people to access data about a variety of issues. Developers can then query this API, and generate unique information. It's an interesting move, because it's the computer scientists that might have found a future career path for journalists.

Journalists skills in accessing sources, determining significance of information, and conveying it effectively is being threatened with the democratisation of information that's occurred due to the Internet. But what the NY Times API reflects, is a new way of creating value - and it's taking more of a librarian approach. Rather than journalism become story-centric, their future may be one where it is data based, which is a lot more exciting than it sounds. Journalists yesterday were the custodians of information, and they can evolve that role to one of data instead. (Different data objects connected together, by definition, is what creates information.)

A private version of the semantic web and a solution for data portability

The semantic web is a vision by the inventor of the World Wide Web, which if fully implemented, will make the advances of the Internet today look like prehistory. (I've written about the semantic web before to give those new to the subject or skeptical.) But for those that do know of it, you probably are aware of one problem and less aware of another.

The obvious problem is that it's taking a hell of a long time to see the semantic web happen. The not so obvious problem, is that it's pushing for all data and information to be public. The advocacy of open data has merit, but by constantly pushing this line, it gives no incentive for companies to participate. Certainly, in the world of data portability, the issue of public availability of your identity information is scary stuff for consumers.

Enter the API.

API's offer the ability for companies to release data they have generated in a controlled way. It can create interoperability between different services in the same way the semantic web vision ultimately wants things to be, but because it's controlled, can overcome this barrier that all data needs to be open and freely accessible.

Concluding thoughts

This post only touches on the subject. But it hopefully makes you realise the opportunities created by this technology advance. It can help create value without needing to outlay cash; new monetisation opportunities for business; additional value in society due to specialisation; and the ability to bootstrap the more significant trends in the Web's evolution.

Relating posts:

Friday, October 30, 2009

Twitter - a de facto standard for real-time data?

I wrote a comment on Twitter's Business Model: Brilliant or Non-Existent? on the Harvard Business blog, that turned out to be rather long, so I post it here as well:

I believe Twitter has done the right thing given the funding they have had and the potential value they can create, extract and control. The potential value lies in the number of users and the number of sent messages, so by improving the user experience the number of users, and the number of messages per user, increases along with the number of applications using Twitter streams. In comparison with most other internet services, Twitter has the ability to become a de-facto standard for a new type of data to be mined. The key question is how much of the value created that will be captured and controlled by the company, and how much of the value that will be extracted by others mining their data. What I find perhaps most impressive is that Twitter has managed to get so many application developers to build applications on top of its API without an outspoken business model, assuring the continuous ability to do so with or without fees or advertising.

There are many speculating about future premium versions using a Freemium model, but with or without paid versions I believe there are so many great ways to monetize the Twitter data. Twitter is increasingly becoming a standardized platform for real-time data, now used by actors such as Microsoft and Google, and their search algorithms will probably be updated with algorithms ranking pages on links from Twitter users, RTs by other Twitter users, by the number of followers, by webpages linking to Twitter profiles etc. This is of course of great value for Internet users, as well as for search- and content companies, and brand owners, that want to know what is going on right now, what are the latest reports within a certain area, who are the people in the world that by interest or profession stay on top of everything that happens within their field, local community etc. It is of course also of great value for the Telcos getting increased amount of data transfer from mobile phones.

Content in Twitter messages will probably soon trigger other services. Say that I Twitter about a book that I have read, it would be in the interest of Amazon to ask me to comment the book on Amazon and recommend a new one, in the interest of the writer to get my feedback, in the interest of my local cinema to tell me about when the movie is coming out, and in the interest of mine to know what friends also read the book and who liked it and who didn’t. By cross-referencing twitter messages with past messages, messages by others or from friends in social networks such as Facebook or LinkedIn, there will be great opportunities for interesting services and business models.

My twitter stream (@sundelin) will probably not be ranked as high as @NYTimes for general news but perhaps my stream will be considered more important in relation to business models, where I tend to find things faster than most others.

Related posts:

Wednesday, October 21, 2009

Videos from the Web 2.0 Summit 09 (Day1)

At the center of both the destruction and creation of new business models is the World Wide Web. At the Web 2.0 Summit, held in San Francisco October 20-22, some of the leading companies share their views on business models and what is next on the horizon. The Summit is arranged by O'Reilly Media and TechWeb, and moderated by John Battelle and Tim O'Reilly.

Videos from Day 2

Videos from Day 3

Opening Welcome Tim O'Reilly (O'Reilly Media, Inc.), John Battelle (Federated Media Publishing)

A Conversation with Brian Roberts Brian Roberts (Comcast Corporation), John Battelle (Federated Media Publishing)

HOB: Economy + Internet Trends Mary Meeker (Morgan Stanley)

HOB: A Call to Arms for Technological Literacy Steve Schneider (WestEd)

Presentation (ppt): A Call to Arms for Technological Literacy

HOB: Do the Economics of Bandwidth Scale? Kevin Johnson (Juniper Networks)

Presentation (pptx): Do the Economics of Bandwidth Scale

HOB: The Case for Antitrust Carl Shapiro (U.S. Department of Justice)

HOB: An Open Platform For Payment Scott Thompson (PayPal, Inc.)

Presentation (ppt): An Open Platform For Payment

HOB: Casually Serving 130 Million with Games Mark Pincus (Zynga)

Presentation (ppt): Casually Serving 130 Million with Games

HOB: A Conversational Approach to Search Mark Drummond (Wowd, Inc.)

Presentation (pdf): A Conversational Approach to Search

A Conversation with Evan Williams (Twitter, Inc.), John Battelle (Federated Media Publishing)

A Conversation with Jeff Immelt (GE)

Relating videos: