So, I'm genuienly curious. How do they make money by "ramping that shit up"? I've seen a lot of companies that have 'get users' as their M.O., but I have no insight into the "profit!!!" phase. Opening their user base seems contary to "profit!!!", from a laymans perspective.
It seems to me like API/User info availability is their leverage w.r.t. profitability, much as it pains me as a potential developer who would like that information for free. How does decentralization make them (and their investors) money? I can't see a way to do both given the incentives.
1. Open API's, good documentation and community engagement goes a long way in establishing developer trust. I don't believe developer trust is correlated significantly with revenue (directly), but it's absolutely correlated with acquisition. I'd argue that Angular or React were partially successful because of the stickiness of their communities, and that's a powerful self-perpetuating force.
2. Monetization is in the queries. Facebook and Google know this. Throwing aside all of their auxiliary services, emerging markets, hardware, et al... between 70-90% of their respective revenue is from direct advertising. If there's a way to scale or "ramp" their revenue model, this would be the portion to focus on.
An alternative: I agree with everyone that they should have turned the APIs back on - they just should have made it mandatory to carry advertising as part of the feeds in order to access the feeds. They could have also layered on federated advertising for anyone consuming the API - meaning, allow those folks to show their own advertising in-stream. They simply pay Twitter a cut. Both of these may have helped them both grow the audience and advertising at the same time.
The desire by some individuals to make insane amounts of money on an idea are directly responsible for a massive SUCK experience for the end users of the software because those users are then forced to use the software in a way that makes the revenue predictable. I used to love to use Twitter because of all the wide variety of apps and things I could do with it with code. Now it's just unusable and dying. I would pay to make that different, but there isn't anything they offer that's worth my time and effort, so I'll go elsewhere.
Why is the data only valuable if someone has fair access to it? Right now, basically anyone can go license the Twitter data and have access to the full firehose. And I don't know how you know if the data is real opportunity here (vs. advertising).
"The desire by some individuals to make insane amounts of money on an idea are directly responsible for a massive SUCK experience for the end users of the software because those users are then forced to use the software in a way that makes the revenue predictable. I used to love to use Twitter because of all the wide variety of apps and things I could do with it with code. Now it's just unusable and dying. I would pay to make that different, but there isn't anything they offer that's worth my time and effort, so I'll go elsewhere."
Are you offering a better path for Twitter and their shareholders, or are you offering a path that feels better, but may have a much lesser outcome for those parties? If so, why would they take it?
And while I agree with you that Twitter is dying, it's not unusable, it's just not usable in the way that you want to use it.
In 2011, 96% of Google's revenue was from AdWords -- in recent years that has lowered slightly due to their diversification and cloud services, but it's still at least a 70% share of their gross revenues.
Facebook is currently ~80%.
The money is in the ads.
The original poster is talking about queries in a difference sense than a Google query - he's referring to it as an API call in a "firehose" sense - so I'm buying access to the Twitter data for my application. I'm suggesting that the number of people who will pay for those API calls is limited.
But no doubt that money is in the ads - that's why I suggested that they should turn the API back on, but require clients to display the ads. Sadly, I think this opportunity is gone as they have killed their developer ecosystem.
[edit] and perhaps that was a poor choice of words. as a developer of high-volume low-latency exchange feeds, "query" has a bit of a different meaning to me.
You are completely right, there is a huge strategic reason for promoting OAuth API's as a large company.
IMO though the API "shutdown" was shortsighted by Twitter. If people are using a competing interface instead of your own, then maybe you should fix your own rather than just shutting down the API. Of course that's easy to say as an outsider. I'm sure the truth is much more nuanced.
Tinder piggybacked off of Facebook OAuth logins in a useful way, and now Facebook has further cemented their permanence as it will now be very difficult for that dating app to sever themselves from Facebook OAuth.
As for directly monetizing the APIs, one thought that springs to mind is charging for the firehose in a federated way. You could, for example, have a query endpoint that looks like this to guarantee standard issuance of data, identity and payment:
GET /api/v1/status/access
{
"payment_address": "13kU1qPtM3WWXrNugWfRPNM1BniMQDw9Ds",
"rate_bytes_sec": 50000000,
"ask_expires_at": 1444492687,
"access_token": "h458Yf301",
"ask_in_satoshis": 1000000,
"ask_window_secs": 3600
}
GET /api/v1/status/h458Yf301
{
"payment_address": "13kU1qPtM3WWXrNugWfRPNM1BniMQDw9Ds",
"payment_received_address": "13kU1qPtM3WWXrNugWfRPNM1BniMQDw9Ds",
"payment_received": 2000000,
"access_expires_at": 1444499887,
"identity_screenname": "kordless",
"status_data_begins": [
]
}
Well, maybe, but you can't save your way to $2b in revenue. Stock prices don't generally go up on cost savings, they go up because of future revenue AND profit expectations. Silicon Valley and Wall Street both prize growth in revenue way over profit. But you're correct that they might discover another revenue stream - but now you're betting a lot on the value of federation.
"Make a payment to the address, then start querying at 50MB/sec for the duration of your valid token (in this example, 2 hours):"
I think you are vastly overstating the number of people or companies that would be willing to pay for this firehose. While it may be useful to some companies, overall the data isn't likely to be enough to be a $1b opportunity. More importantly, the number of people willing to buy isn't likely to grow - so a B2B play can be a minor part of their revenue but I don't believe they'd be able to depend on it for massive growth.
"And yes, I'm proposing Twitter should use Bitcoin to monetize query traffic. Even better, charge people for posting lots of statuses, or following and unfollowing lots of people. Link ask price to signal/noise ratio."
Given the current cost structure of other services (Facebook/Instagram/SnapChat), I'd argue you're unlikely to get anyone to pay for it, and you're reducing both the size and any potential growth of your audience dramatically.
This is from their Q1 2015 report, so data licensing and other revenue is probably $200M ARR now. Clearly people are willing to pay for access. If they improve the way they provide that, it just might be bigger than a $1B opp.
I would be willing to pay for on demand abilities to control who I follow and unfollow without being throttled.
- That the opportunity is there - and that the growth will continue. This isn't a given, but it is possible. I think the fact that Twitter is obviously investing more in the advertising business tells us what we need to know about the data business - that it is good, growing, but will always remain a relatively small portion of their overall revenue mix. Now you may argue that that is because they're blocking it - but my assumption is that they are investing based on Total Addressable Market (TAM) and experience. - That the problem is the payment system. There's little to support this - there's little sign of demand or willingness from individuals or small companies to spend on this at scale.
The fact that you're willing to pay for on demand controls is great and fine, but it does not mean that anyone else is willing in the same way.