At first glance, it may not seem like that big of a deal that Twitter (NYSE:TWTR) is just a week or so away from hosting its first developer's conference in four years. After all, its primary social media competitor Facebook (NASDAQ: FB) did the same earlier this year, after a three year hiatus, and bringing app developers into the fold is simply good business. But Twitter's conference, dubbed "Flight," isn't your run-of-the-mill gathering.
As longtime Twitter fans are aware, it has seemingly gone out of its way to upset third-party app developers, with many simply throwing in the proverbial towel and disassociating themselves from the tweet-master altogether. The bad-blood goes back years, and while there are almost certainly those that won't forgive and forget, Twitter's hoping to not only help developers easily and profitably supply its users with helpful apps, it has some serious public relations work to do, too.
Twitter takes Flight
Twitter is, "kicking off a new era for developers on the Twitter platform" at the Bill Graham Civic Auditorium on Oct. 22 in San Francisco, California. The plan is to begin the gathering with a keynote address from Twitter CEO Dick Costolo, then break out into sessions to explore ways that developers can build "the best mobile apps."
In conjunction with its Flight conference, Twitter also revamped its existing dev site in an effort to make the process of creating and submitting apps more seamless, and to provide a resource to get questions answered. A key objective of Flight is for Twitter to address what many investors see as a major concern: user engagement.
Twitter's slowing user growth is generally at the forefront when naysayers discuss concerns about its future, and for what remains an early stage company, those concerns are legitimate. Case in point: Twitter ended 2013 with 241 million monthly active users, or MAUs. By the end of 2014's Q1, Twitter's MAUs had only grown by 14 million, and even accounting for the recently completed World Cup, Twitter ended Q2 with 271 million active users. For an upstart social media concern, that's hardly the kind of user growth investors rightfully expect.
But every bit as important as increasing its user base, are problems with keeping Twitters existing 271 million MAUs actively engaged. For both analysts and industry pundits, concerns surrounding Twitter's user engagement continues to be a problem. For advertisers, the sheer volume of users is important of course, but if they're not staying on the site for any appreciable period of time, it negatively impacts an ad's effectiveness.
For many of the same reasons Facebook held its F8 dev conference in April of this year, also in San Francisco, Twitter recognizes that getting developers on board is critical. Not only will successful apps help keep users engaged, as Facebook recognizes, there are also in-app advertising opportunities big boys like Google and Apple are taking full advantage of. But unlike Facebook and others, Twitter has another challenge to overcome to bring developers into the fold.
Why all the fuss?
It was about two years ago Twitter caused a stir among the developer community when rumors began swirling that it was going to play hardball with third-party apps. Turned out the rumors were true when Twitter issued a blog post that said it was putting an end to apps it felt were too close to the, "mainstream Twitter consumer client experience." In its blog, Twitter gave developers six months to comply, or face the consequences. To be sure, some developers complied; others, however, were not so inclined.
The consequences it warned of were ugly for many developers -- even those that had worked with Twitter for years. The folks at Tumblr weren't shy about voicing their displeasure, and longtime photo-sharing partner Twitpic was issued an ultimatum: drop your trademark application, or we'll see you in court. Twitpic, it should be noted, had worked with Twitter since 2008. Without the funds to fight Twitter in court, Twitpic CEO Noah Everett was forced to shut his company down.
Not surprisingly, changing the app rules midstream, and even threatening legal action against longtime partners, sent many in the relatively tight-knit development community over-the-edge. While Facebook's F8 conference was all about making the app dev process easier and more efficient, something Twitter is also hoping to accomplish, with its rocky past, the tweet master has a lot more to accomplish at Flight than showing developers how to build new apps: it needs to mend some seriously broken fences.
Though its stock price is down over 23% year-to-date, Twitter continues to trade at a sky-high valuation. Clearly, investors aren't overly concerned with questions surrounding slowing user growth and engagement issues, yet. At some point though, investor's patience will run thin and concerns that are currently being glossed over will rise to the surface. Twitter's Flight conference is a chance to begin addressing its user-related problems, and just as importantly smooth some ruffled feathers. Unlike Facebook's recent F8 dev gathering, Twitter needs its Flight conference to be a success, in more ways than one.
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, Google (A shares), Google (C shares), and Twitter. The Motley Fool owns shares of Apple, Facebook, Google (A shares), Google (C shares), and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.