Saturday, February 19, 2011

Twitter eats its young


Yesterday Twitter committed a hostile act against both its customers and one of its largest Twitter client developers, UberMedia. They cut off all of UberMedia's clients from the Twitter platform. Basically Twitter claims they did it because the UberMedia clients violated certain rules. These are rules that apparently UberMedia has been violating for almost a year, or perhaps longer.

What I find most interesting is trying to analyze what the hell Twitter was thinking. In an excellent blog post, Mark Suster lays out the basic fact that Twitter could have been perceived as the good guys by just putting out a 72 hour warning to both UberMedia, and users of UberMedia Twitter clients, that they were going to be cut off if things's weren't fixed. This would give UberMedia a chance to fix things, and it would give customers a chance not to wake up blindsided and Twitterless. The Twitter team is smart, so it's hard to imagine they didn't consider this as an option, which in an of itself gives me pause.

The apparent issues involved trademark, and a potential privacy leak around direct messages. I'm sure Twitter would argue that UberMedia was not responsive to previous requests or warnings and that they have a right, and in fact a responsibility, to defend their trademark and protect customer privacy.

But here's the thing. They have waited on these issues for a year, so no matter how egregious the failings of UberMedia are, a 72 hour warning wasn't going to hurt anyone.

In response to Suster's post, Dick Costlo, Twitter CEO tweeted "@msuster your post is a misinformed and contrary to what I'm certain you would counsel as an investor."

Costolo's response is, on its face, ridiculous. First, Suster was not misinformed because everything he commented on was in the public record except his opinions which are, of course, just opinions. Second, I can't imagine Fred Wilson or Bijan Sabet, both early Twitter investors and board members, suggesting to Dick Costolo that it would be in Twitter's interests to *surprise* millions of customers by turning off their Twitter client with no warning. I could be wrong because I am certainly not in their heads, but neither Fred nor Bijan strikes me as customer-hostile, take-no-prisoners, do-whatever-you-need-to-do regardless-of-how-it-impacts-customers type of people. I would be shocked to hear that this was done on behalf of the Twitter board of investors or that they would, if asked, have suggested this was a good idea.

What's obvious is that these actions are being taken because Twitter is threatened by UberMedia, and possibly pissed. UberMedia has been buying up Twitter clients like a hungry tourist binging at a Vegas buffet. They have just raised $17 million dollars, and its CEO Bill Gross essentially invented Internet advertising when he created Overture. So perhaps they *should* be threatened. Still once you operate as an ecosystem, you have a broader responsibility than just to maximize profit and kill all potential competition from your invited partners. Maximizing profit is obviously a critical goal, but screwing platform developers and customers for no ostensibly defensible reason in a clearly hostile way may not be good business (it's certainly not *decent* business), and it unquestionably gives people a reason to distrust you with what is now, like it or not, a shared asset.

In many ways this reminds me of this week's ridiculous Apple policy change requiring that Apple get 30% of platform subscription revenue of 3rd party developers. Twitter clearly felt they could get away with this and so they did. It was a very Machiavellian, and I think poorly thought out move. But this is not a decision I think they would have or could have made three years ago. Similarly, Apple would not have been trying to take 30% of subscription revenue when they launched their developer platform. They feel they can now because they think they have all the tigers by their tails.

Perhaps Dave McClure said it best when he commented (on twitter) "yo @dickc -- guess Twitter won't be following that Google "Don't Be Evil" thing, eh? ;). " The dickc there is Dick Costolo. And that does about sum it up. It is hard to be a platform vendor and not end up occasionally on the dark side. There are a lot of interests to balance. But *damn* does it have to be so knee jerk, and blatantly obvious. If not for the benefit of the platform, at least in the interest of not decimating heretofore well curated trust in you as the keeper of said platform.

9 comments:

  1. Man you're bitter about Apple.

    Remember this, in the long run, with regards to negotiations about value in the chain and each entity's contribution, the market doesn't lie. You WILL get the value you deserve. So will Apple. and Hulu. and Netflix. and Amazon. and content producers. and service providers. In the short term, one or more of these could have gotten richer than they deserve and the market will correct that. Nothing "machiavellian" about business - and I'm an altruistic empathetic regular person, just believe that if a company says it is for profit, it is free to pursue its goals. If it hurts partners, it will suffer. If it eliminates waste and makes consumers happy, it will prosper.

    Can't like capitalism when it makes you rich and whine about it when you think might lose. If you don't have leverage, it is because someone thinks you're not adding as much value as YOU think you are. If you can fix that, go ahead and take the lion's share.

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  2. lol. I think you meant to comment on another post since this one is primarily about twitter.

    But I will agree that markets make decisions about value. And in todays world, part of the "market making" is "the market" discussing openly what they think about "the market". Egypt and Tunisia used Facebook to communicate dissent and to organize the "political" market. I and lots of other folks are using their blogs and other internet mediums to make our arguments and to organize regarding the iOS market. And as far as "Can't like capitalism when it makes you rich and whine about it when you think might lose" I can like whatever I want (regardless of how you characterize it) and I can write about it if I like. And if other people agree and we impact the market we can do that too. And I think that as a result of this public discussion, apple gets a very quick idea that people don't like this and it is going to hurt them. As I see it that is capitalism at its finest.

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  3. No I chose this entry about Twitter to say you're really bitter about Apple, seeing that the Apple theme was consistent whether you intended to talk about Apple or not.

    " I can like whatever I want (regardless of how you characterize it) and I can write about it if I like."
    Works both ways, you wrote about x. I wrote about you writing about x. I'm not going to chase my tail on that circular argument.

    "And I think that as a result of this public discussion, apple gets a very quick idea that people don't like this and it is going to hurt them."
    I'm not against organizing or negotiation. It is just that repeated talking points, references and rehashed words whining about the same issue tend to have diminishing returns. We've seen a ton of that in the last few days. To all those who oppose this move by Apple, I say stop talking trash and start pulling your apps. That's my point, I think Apple heard everyone the first time, before the public announcement about the new rules.

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  4. And please, don't insult freedom movements by comparing what you're doing to their efforts. Here you can actually choose your partners in the business world. You never have to choose Apple but yet somehow people find compelling business reasons to do so. Business reasons, not personal.
    Regardless of what Clarence Thomas may say (or not : http://www.nytimes.com/2011/02/18/opinion/18fri3.html), corporations are not people. Business struggles are nothing like struggles for basic personal freedom.

    So no, Tunisia and Egypt have nothing to do with this. It is an insult to their people and your readers to make that ludicrous claim.

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  5. "whining about the same issue tend to have diminishing returns"

    Or at least thats what people who dont like an idea would like to believe. Tell that to Mubarak. Or Gaddafi before they pulled the "whining line" err... I mean Internet.

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  6. "So no, Tunisia and Egypt have nothing to do with this. It is an insult to their people and your readers to make that ludicrous claim.'

    Nope. Its very simple, and tightly connected. Follow along. Speech has power. Thats why we have laws to protect it here. What you call "whining" I call "speech" and it will always be powerful, whether certain trolls disagree or not. In fact, its most powerful *when* certain trolls dont agree, whether its about business practices or government practices.

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  7. "troll" - :). Deep down inside, even you know that's misappropriated.

    I'll leave you to it, apparently I rile you too much for you to actually focus on the real issue.
    However, in parting, for the benefit of those to come, try addressing the following, succinctly without the freedom fighter grandstanding
    - I still haven't heard an argument for why companies shouldn't just go ahead and pull their apps literally right away, if this is such a terrible deal.
    - Why are you continuing your iOS development?

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  8. Like the troll that you are, you just want to make noise but have no interest in actually making any sense since most of the answer to your question is already discussed here: http://whydoeseverythingsuck.com/2011/02/rip-pandora-kindle-on-iphone-and-many.html and http://whydoeseverythingsuck.com/2011/02/apple-is-actually-asking-for-100-of.html.

    The bottom line is the new pricing scheme does not come into play until june, so why would anyone pull before then. Rhapsody has already said they are pulling out and all the other music companies will as well since they dont have 30% margin to play with. Ditto Amazon. Regarding us pulling out, if the rules remain as they seem to be we will have no choice. If the rules are clarified so that they do not include SaaS we wont pull out. But we are several weeks from finishing our iphone app so worst case is that the iphone app is prototype for our android and mobile html5 apps.

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  9. @HW

    "Or at least thats what people who dont like an idea would like to believe. Tell that to Mubarak. Or Gaddafi before they pulled the "whining line" err... I mean Internet."


    Was Internet a concern regarding freedom of speech in Egypt or Libya?

    NO!
    By "cutting" the internet, they were trying to play their dirty game by shutting the lights, Not to deny any freedom of speech.

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