The Demise of the Ecosystem
Until this year, twitter had plenty of feature gaps. I remember when it wasn’t unusual to go to Twitter.com or text 40404 to share my thoughts with my followers. Over time, new companies were formed to take advantage of what Twitter wasn’t doing on its own. Smartphone apps, analytics, scheduled tweets, pictures and video, among others, were integrated into the service through third-party development efforts to make Twitter easier and more useful to its rapidly growing user base. This trend gave us a new wave of social media household names, such as HootSuite, TweetDeck, UberTwitter and Topsy.
The market for enhancing Twitter was robust and growing … which his probably what caught the company’s attention.
Though Twitter has dabbled in closing its feature gaps in the past – e.g., with the 2008 acquisition of Summize – it approached the task in 2010 with unparalleled vigor. Kicking off the Chirp developer conference in April with the acquisition of iPhone app developer Tweetie, Twitter introduced new features, applications and revenue models at a rapid pace, much of it coming at the expense of the ecosystem that fueled its popularity. Then, with the “new Twitter” rolled out, it almost looked as though the company was truly going head-to-head with its own application ecosystem.
And, it makes perfect sense.
Twitter is ostensibly eager to demonstrate the legitimacy of its sky-high valuation, estimated to be around $4 billion recently, especially if a liquidity event is in the cards. In the near-term, it’s prudent for the company to consolidate user interaction and traffic to increase revenues, widen margins and cultivate end-user loyalty. Consequently, what’s good for Twitter isn’t necessarily good for the companies that have tied their future to the platform – leaving the ecosystem exposed to considerable risk.
The Standard Coping Mechanism
The prevailing wisdom for ecosystem companies has been to pursue broader reach. It’s a straightforward diversification play, in which Twitter ecosystem companies expand their services to other platforms. HootSuite, for example, lets users publish to LinkedIn, Facebook and WordPress, as well as Twitter.
This tactic does reduce platform-related and strategy risks, but it fails to provide an opportunity for differentiation. Social media content and analytics management is already well on its way to commoditization, leaving little room for the rapid growth that Twitter ecosystem companies (and their investors) likely crave. The only ways to compete are on usability, insight and cross-platform reach. The barriers to entry are low – as Twitter has demonstrated in triggering this problem for its ecosystem – making differentiation virtually impossible.
For the ecosystem as a whole to recapture its momentum, a fundamentally different approach is necessary. Finding a way to cut through the endless tweets to help users with specific interests monitor and participate in a targeted manner could provide a wide range of opportunities to a sector that’s watching its future shrink.
The future of the Twitter ecosystem is uncertain, to say the least. A wave of enhancements this year has allowed Twitter to take traffic share back from the third-party application developers that helped accelerate Twitter’s growth. And, this appears to be a significant part of Twitter’s strategy going forward.
As Twitter looks to shore up its position, particularly as suitors reportedly bring multibillion dollar offers for the company, the ecosystem could suffer. Many of these companies are looking for ways to survive, yet they don’t seem to be looking in the right places: a great opportunity could be slipping through their fingers. For this sector of the social media market to regain its footing, it should look back to an approach that’s been around in the marketing world for decades. Leer más “How Industry Marketers Can Save Twitter’s Ecosystem”