Posted May 25, 2010 9:10 am by with 6 comments

Tweet about this on TwitterShare on LinkedInShare on Google+Share on FacebookBuffer this page

The nerve! How dare those guys at Twitter even consider first booting all third party ad networks to the curb. Now they think they can charge publishers who are making money from the Twitter stream too! At least that’s what their new terms and conditions state in a truly less than clear manner, which is the Twitter way. I say more power to them.

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?

  • I saw this coming a while ago because their investors want to get paid
    .-= Impulse Magazine´s last blog ..Motivational Quote by Mike Dooley =-.

  • David Henley

    Twitter + tax = Twax?

    Perhaps people will take the same sides as they do with taxes. Some understand their necessity, others don’t.

  • I don’t blame them. Twitter needs to be profitable or show some revenue stream if they want to take that website well into the future. VC money is going to slow down eventually if they don’t find a way to bring in a significant revenue stream to grow the business.
    .-= Maciej Fita´s last blog ..Google TV Is Here =-.

  • I knew this was going to happen. I think they will fail if they charge money. It will just open the door for another free service. I remember when there was rumors that hotmail was going to start charging for free email.

  • I think there will be plenty of bumps in the road, as there are with any widely popular website and everyone is watching every move that Twitter makes. Twitter certainly needs to charge some fees for some features, and for creating a wealth of start-ups based on their service. Developing applications and services based on one huge service for free is a luxury that is only available because Twitter had plenty of funding to begin. So, they could charge a monthly fee to third party applications that use Twitter’s service to make money off of Twitter. There are so many people making money off of Twitter for free, why can’t Twitter charge a little fee here and there?
    .-= Kingsley Tagbo´s last blog ..Why Is Requirements Management A Top In-Demand Skill? =-.

  • Hi It will be interesting where Twitter exactly goes with this as for my blog it has been the best social media marketing tool I have ever seen. So watch this space. You have to monetise some time. Cheers
    .-= Jeff Bullas´s last blog ..Will These Competitors Slow Facebook’s Growth? =-.