Twitter's mad dash to 200 million users was made possible, in part, by the vibrant ecosystem of Twitter software clients that provide many users with an on-ramp to the service. But having so many Twitter users access through third parties limits the control Twitter has over its own user experience, including if and how its ads are displayed.
Twitter has already acquired one such client -- Tweetie -- and is in advanced talks to the largest, Tweetdeck, for a reported $50 million. If and when they do, they will have spirited the company away from Bill Gross's UberMedia, another Twitter client that prematurely announced its own deal to acquire Tweetdeck, but more importantly has not been playing by Twitter's rules.
It's no surprise that Twitter wouldn't want UberMedia to own Tweetdeck. Though there are no official numbers for users of TweetDeck, it is the most popular third-party client and many Twitter power users -- major bloggers, journalists and Twitter-savvy companies and brands -- use the client, and losing those users to UberMedia is not something that Twitter wants to happen. A March report by Sysomos calculated that as many as 5.5% of tweets originate from inside TweetDeck. Additionally, UberMedia CEO Gross, was one of the creators of search advertising at Overture, which was later sold to Yahoo.
Mr. Gross is no stranger to making serious profits from advertising, and UberMedia's initial conflict with Twitter surfaced when Mr. Gross aimed to serve his own advertising into Twitter's stream.
When Twitter first launched, it had a happy-go-lucky open API that encouraged everyone to build whatever kind of apps they wanted to build -- and people did just that , creating an ecosystem worthy of an SAT question. But as time went on, Twitter learned which type of companies in the system were beneficial to it's own fledgling business plan, and which types were not.
Twitter has been aiming for more control of that stream and everything that happens around it. In March, platform head Ryan Sarver told developers that Twitter needs "to move to a less fragmented world, where every user can experience Twitter in a consistent way." Owning TweetDeck would certainly make that world even less fragmented.
The new structure of the ecosystem was laid out by Twitter in March -- following changes initiated by Twitter about a year ago -- declaring that companies wanting to build complementary services to Twitter's bread and butter were encouraged to do so. But companies wanting to do what Twitter was doing to earn cash -- advertise against the Twitter stream -- were asked to stop. UberMedia did not, and Mr. Gross continues to talk openly about building a "Twitter killer." It's no wonder Twitter wants to make sure UberMedia doesn't get to own a large swath of the Twitterati.
Neither Twitter nor Ubermedia are commenting on the tussle, but the battle over Tweetdeck shows the importance of Twitter taking control over more of the user experience of Twitter, and Twitter's ad products, promoted trends, tweets and accounts. From a business perspective, more control of the brand is also a good idea. "Twitter doesn't want people using other services if they are always interacting with Twitter just from TweetDeck, Twitter is losing brand awareness. Twitter wants people to be using their own branded services," said eMarketer social-media analyst Debra Aho Williamson.
It should be noted that Twitter works just fine with a great many of its third-party clients. Hootsuite, for example, was its launch partner for "promoted tweets" last year. But Hootsuite users don't see Twitter's equivalent of a homepage ad -- Promoted Trends, which appear on Twitter.com. "Based on the current marketplace, an acquisition of TweetDeck makes sense," said HootSuite CEO Ryan Holmes.
Going forward, Twitter will have to walk the line between controlling the experience and the monetization while allowing the third-party ecosystem to thrive. "It's not the wild wild West of the Twitter ecosystem any more," said Klout CEO and founder Joe Fernandez. "It used to be anyone could go do anything. There's a lot more structure now, but if you abide by that structure and collaborate with Twitter and do things for the benefit of the entire ecosystem, I find they are much easier to work with than ever before, and very responsive."
Mr. Fernandez said he thinks it's a legitimate request from Twitter to the companies in its ecosystem, adding that the other big wigs in the social media space are much more prohibitive. "If you try to do something on Facebook that eats into what they're doing, you'll get shut down," Mr. Fernandez said. "And LinkedIn barely lets you do anything at all." Twitter may still be the happy hippie of the social media powers-that -be, but the hippie now has a bank account.