Fool Me Once, Shame On You…

… Fool Me Twice, Shame On Me!

So goes the old saying and this week maybe more than any it applies to our friends over at Twitter.  Less than a week before their inaugural conference, Chirp, they make an announcement that they are buying Tweetie and rebranding it Twitter for iPhone.  There’s a whole debate about whether Fred Wilson (who has a great blog at http://avc.com) signalled it earlier in the week or not, but who cares, that’s a moot point.  The point is, Twitter grew considerably off the back of some really great work by independent developers making awesome clients on every platform.  Companies like Tweetdeck, Twitterrific and Seesmic have pushed the envelope in social network aggregators largerly with Twitter at the centre.  Then, in one single swoop, Twitter cuts them off at the pass – not only are they buying and rebranding a competitor (thus making it the “official” client for iPhone and eventually Blackberry as they announced) but they are going to give it away for free.

This move not only means that these small independent companies will now have to compete with Twitter, but in many respects, Twitter has made it much more difficult for them to earn a living doing it.  Of course, this doesn’t bother Twitter who have their non-advertising, advertising platform coming, “Promoted Tweets” again by the looks of which, none of their developer community will get a taste of revenue-wise.  Eventually, this concept will go “in stream” and it will be interesting to see how that plays out, I doubt it will help developers.

Of course, it then all depends on how the developers themselves react.  Seesmic CEO, Loic Le Meur has come out with a video response on his blog ( http://www.loiclemeur.com/english/2010/04/fck-you-naysayers-twitter-did-not-fck-us-and-just-rocks.html) giving his point of view.  According to Loic, all is good, he still trusts Twitter and they rock.  Well I say to Loic, read the title and first line of this post – less than a week ago, @Ev and @Biz basically rushed in and took a big drink of your milkshake with out giving you so much as a heads up.  Only a fool would be so quick to trust these people again.  Compound that with the fact that they’re now talking about going after URL Shortners (which is a nice little analytics business in my opinion).  Keep your head up Twitpic!  I also think everyone should go back and re-read some of the stuff that Dave Winer (http://scripting.com and @dwiner) was writing about Twitter a few months back.  He pointed out that perhaps having a private company owning the “platform” wasn’t such a good idea and everyone would be better off with something like RSSCloud as an open standard and companies fighting it out in the tools area – I think Dave’s predictions about where this could head look quite prophetic now.

Ironically, a month ago, Arrington was lamenting on TechCrunch (http://techcrunch.com/2010/03/15/twitteruh-oh-not-another-do-no-evil-company/) about @Ev saying how Twitter’s guiding principle was “to be a force for good”.   I don’t necessarily think sandbagging your “partners” in business is being a force for good.  I also think through the prism of hindsight that Fred Wilson saw this PR trainwreck coming and tipped the public to what was coming to protect his investment in Twitter when clearly the management team had severely dropped the communications ball.  

I have a healthy respect for the Twitter guys.  They are two time winners with Blogger and now Twitter.  However, they are now in a new position for themselves – they’ve take a boatload of VC money and to justify their ridiculous valuation they now need to start showing potential acquirers or the market some real revenue.  Nobody values a business making $20m a year in revenue at $1b for long.  I think the next twelve months are going to be interesting for Twitter.  I don’t think it takes much management nouse to spend a bunch of money, innnovate very slowly and give your service away for free.  The challenge will be having built up that massive user base working out a practical way to monetise it at such a level as to keep the valuation high and keep the shareholders happy that a profitable exit is still a likely scenario.  These challenges over the next twelve months will show us how clever these guys really are.