Twitter: The Next Apple?

After four years of operating in the open, letting users and developers experiment relentlessly, Twitter is locking some of its doors.

"It is critical that the core experience of real-time introductions and information is protected for the user and with an eye toward long-term success for all advertisers, users and the Twitter ecosystem. For this reason, aside from Promoted Tweets, we will not allow any third party to inject paid tweets into a timeline on any service that leverages the Twitter API," Chief Operating Officer Dick Costolo wrote in a blog post yesterday. [Emphasis added.]

In years past, I've likened Twitter to Google (Nasdaq: GOOG  ) , because of how it indexes the real-time zeitgeist that exists on the Web. The free-flowing open-source nature of Twitter seemed, for lack of a better word, Googly.

Now, looking at Costolo's language, I see more in common with Apple (Nasdaq: AAPL  ) , which is forcing iPhone developers to use its tools and write only to the programming interfaces it deems appropriate. Adobe (Nasdaq: ADBE  ) has all but abandoned efforts to get Flash on the iPhone as a result.

Yet I like what Twitter's doing here. First off, it's nowhere near as draconian as what Apple has planned. As Costolo points out in his post, this isn't a ban on Twitter advertising. Instead, the social superstar is taking steps to ensure that tweet-streams aren't unnecessarily polluted with content no one wants. Twitter, as gatekeeper, will keep the polluters out.

"Third party ad networks are not necessarily looking to preserve the unique user experience Twitter has created," Costolo wrote. "They may optimize for either market share or short-term revenue at the expense of the long-term health of the Twitter platform."

Put another way: If Twitter's $1 billion valuation is directly related to the intelligence provided by those inhabiting the network, anything that makes Twitter dumber is dangerous. Unrelated ads could have that sort of effect.

So Twitter is treading carefully, as it should. As much as Promoted Tweets might help more companies like Amazon.com (Nasdaq: AMZN  ) and Dell (Nasdaq: DELL  ) use the service to sell, spammers have a history of ruining great platforms. (Email, for example.) Limiting API access reduces the chances they'll do the same to Twitter.

But there's also a risk in taking this step. Twitter's success owes largely to third-party contributors who've built upon the API. Locking doors could leave willing innovators out in the cold at a moment of maximum opportunity -- one in which tectonic shifts in the advertising industry are creating superlative-sized opportunities.

Costolo and the entire Twitter team need to strike the right balance. If they do, Twitter's resemblance to Apple will reflect its performance more than its policies.

Would you allow Twitter to advertise in your tweet-stream? Discuss in the comments box below.

Amazon, Apple, and Adobe are Motley Fool Stock Advisor selections. Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy needs a glass of water. Would you mind?


Read/Post Comments (4) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 26, 2010, at 12:13 PM, DaMofo wrote:

    @Twitter

    Show me the revenue stream. Twitter = Apple...nice article title but far from it. Developers will play in their sandbox, with their tools and rules, until people tire of Twitter, they go bankrupt, and/or Facebook makes them obselete.

    You can find me @ ...just kidding don't have an account. Does anyone else think Twitter will rise and fall like MySpace?

  • Report this Comment On May 26, 2010, at 12:31 PM, Henry3Dogg wrote:

    Apple is the next Apple.

  • Report this Comment On May 26, 2010, at 10:28 PM, celgart wrote:

    I've grown tired of Apple, talk about a bubble. Apple is news, and as they say, buy the rumor (I did many years ago for about $30/share), sell the news, sold before this last downturn ~ $260. Twitter may not be the next Apple, but you go ahead believing "Apple is the next Apple" while I find the real next Apple.

  • Report this Comment On May 28, 2010, at 9:30 AM, TMFMileHigh wrote:

    @DaMofo,

    We've already seen the revenue stream. Google and Microsoft are licensing access.

    >>Developers will play in their sandbox, with their tools and rules, until people tire of Twitter, they go bankrupt, and/or Facebook makes them obsolete.

    Forgive me, but I think that's a tall glass of crazy you're pouring. What makes you think Twitter would go bankrupt? Let's at least give the company credit for attracting businesses. How many companies use Facebook as a selling platform in the way that Amazon and Dell use Twitter?

    Thanks for commenting and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1192933, ~/Articles/ArticleHandler.aspx, 11/26/2014 12:32:32 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement