Twitter hugely popular but where's the payoff?

WHILE TWITTER has moved into the mainstream as the social networking tool du jour, key questions remain about the service.

With a reported six million people using the updating service (Twitter itself doesn’t release user numbers), the site has struggled to deal with demand, resulting in long periods where it was unaccessible. The bloggers and techies who were first to embrace it following its August 2006 launch are now expressing disillusion at the creeping commercialism and spam.

Perhaps most crucially, despite having raised $55 million in venture capital funding, Twitter not only hasn’t turned a profit but doesn’t generate revenues. This raises serious questions not just for the company itself but the thousands of developers who have written software that interacts with the site.

A note on the Twitter site explains that “Twitter has many appealing opportunities for generating revenue but we are holding off on implementation for now because we don’t want to distract ourselves from the more important work at hand which is to create a compelling service and great user experience for millions of people around the world. While our business model is in a research phase, we spend more money than we make.”

While charging users for the service would be commercial suicide, Eoghan McCabe, founder of web development firm Contrast (see panel), believes businesses may pay. “I think that’s really interesting because the plain old advertising model would not be any use to them,” says McCabe. “But they could charge brands which want to represent themselves well.”

That chimes with the view of Loic Le Meur, chief executive of video sharing service Seesmic, which has created Twhirl, the desktop client that accounts for 6 per cent of all Twitter traffic. While Twitter still toys with its business plan, Le Meur plans to offer a premium version of Twhirl which companies can use as a customer service tool. He says firms such as Dell, Ford and Intel are using his free software to monitor what customers are saying about their products.

Pat Phelan, the creator of Twitterfone and one of the earliest Irish adopters of the service, believes Twitter “will make money from its API” or application programming interface, the method that websites use to open their data and services open to third parties. It is the API that allows you access your Twitter account through Twhirl and other clients such as TweetDeck and dabr.

Le Meur says about 70 per cent of Twitter messages, or tweets, are generated from third-party clients so he believes charging for use of the API “would kill Twitter”.

Although a huge fan of the service and “how much it has changed the web and media landscape”, McCabe believes that even Twitter itself does not know how it will turn a profit. He points to how two user conventions – prefacing replies with the @ sign and posts relating to an event with the # tag – were officially adopted by Twitter. “They have always been open and frank that they are letting the community drive the service and where it goes,” he says.

While the technique will never be taught in business school, it has attracted high profile backers including Amazon founder Jeff Bezos. Hardened observers believe Twitter may simply do the classic Web 2.0 flip – selling the firm for a massive sum and letting the new owners figure out how to make money. The company reportedly turned down a $500 million bid from Facebook last year.

“If Google don’t buy it in the next quarter, I’ll eat my hat,” says Phelan, who admits to getting disenchanted with the amount of spam creeping into the service. “The information on it is amazing and its real time while Google is just about historical data. I think it’s just the price that has scared Google off.”

Twitter evolves: the next generation

Irish software developers have embraced the possibilities of Twitter with enthusiasm. Here’s some of the more interesting creations.

Twitterfone

(www.twitterfone.com)

You’ve spent the day in the office twittering, but how are you going to get your fix on the way home? Twitterfone lets you dial a local number from your phone and speak your messages, which are automatically posted. A collaboration between Cubic Telecom founder Pat Phelan, Dublin firm Dial2Do and their international partners.

Qwitter

(www.useqwitter.com)

Twitter sends you an e-mail when someone starts following you but not when they stop. Qwitter, from Dublin web developers Contrast, fills the gap by not just e-mailing you when someone unfollows but also telling you what post prompted the virtual snub.

Twitter Mosaic

(sxoop.com/twitter/mosaic.pl)

Enter your @username, choose followers or friends for a mosaic of your Twitter buddies. Embed this on a web page or order it printed on a mug or mouse pad. From the makers of Pixenate, the online photo-editing tool.

Twecipe

From the people at LookandTaste.com. Follow @twecipe, send it ingredients and you will get a recipe.

Tweetscan

(www.tweetscan.com)

Cork technology collective Gogozaa has provided a comprehensive search service for Twitter and similar micro-blogging services.

Sick City

(www.sickcity.org)

Twitter was first with news of the Mumbai attacks, so why not use it to predict the next pandemic? Led by software developer Paul Watson, who by day works for Waterford-based FeedHenry.