All Things Digital’s Peter Kafka took the initial reaction from yesterday a step further by seeing just where Twitter may be heading with this whole generating revenue distraction.
Twitter isn’t just booting other ad networks out of its stream. It now plans to tax some start-ups and publishers that are making money from the service.
That’s a pretty significant change for the company, which has previously allowed anyone to do just about anything with its data, without asking for a cent.
But that’s over, based on the new terms of service the company released today. The relevant excerpt:
In cases where Twitter content is the basis (in whole or in part) of the advertising sale, we require you to compensate us (recoupable against any fees payable to Twitter for data licensing).
This will likely set off some kind of outcry in the Internet space. Mainly because people have this hair-brained idea that a business like Twitter has no right to ever charge for anything. Where this notion of everything being free and lasting forever came from is beyond me. It certainly isn’t based in any business or common sense.
Kafka interviewed Dick Costolo the COO of Twitter and apparently the chief heavy who will get the task of announcing anything that is going to set off a Twitter-storm of sorts. I haven’t seen Biz even a stone’s throw near this announcement. Twitter wouldn’t want to soil his good image of being the Internet enabler by connecting him to the dirty activity of making money to keep the business running for the long term.
Kafka explored (or at least tried to) just what Twitter would be doing with large publishers like Huffington Post that are using Twitter content extensively as part of their content delivery. The following quote is from a business development executive (in other words, a sales guy) and sounded like typical sales talk.
We’re not trying to prevent people from building businesses,” says Tony Wang, a Twitter business development executive who joined my call with Costolo today. “We’re saying if there’s this thing you’re doing, and you’re selling ads against it, and it’s really big, we want to participate in that.”
Well, that clears things up. We just have to sit back and wait for Twitter to define who or what is big then see what they plan to get in return for their content. I want Twitter to make money and I think that they need to be compensated but this kind of “sales speak’ sounds awful and needs to be shelved if they want to do this with any class.
The bottom line on all of this can be shaped up in three letters: TBD. Twitter is offering precious little guidance in this area because they are probably still defining just who will be getting invoiced for their usage of Twitter’s content.
Costolo did shed some light apparently on just how big publishers like Huffington Post may be paying: working together with Twitter to monetize the content. He said
HuffPo’s Twitter Edition pages are an awesome example of why those guys are one of our most innovative partners. We actively support and encourage those efforts, and look forward to working with them to monetize these opportunities together. In fact, I think they will play an important role in helping define smart approaches to advertising around Twitter-driven content.
So this is going to be a ‘hurry up and wait’ scenario like always because the rules are likely to be made up as it goes. Honestly, how else can it be done since this is a new area and there are no real precedents have been set for this kind of engagement.
How do you think it will play out?