Twitter’s Turmoil: Was It the APIs?

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It’s been a rough few months for social media giant Twitter. Its COO Ali Rowghani resigned, Vice President of Media Chloe Sladden left, and it got a new CFO.

That’s a lot of upheaval at a time when the company is struggling with a big problem: flat-lining growth in its user base. Which is interesting because just last November, the San Francisco-based company seemed poised for big things. It had completed a successful IPO and was touting better reliability of its service. What went wrong?

It’s a bit of a puzzle. When Twitter first started, it was widely praised for being a model of a new “open” company that did a few central things and then let developers have deep access to its API to build the applications and services users wanted. In 2011, the company boasted that third-party applications had grown from 150,000 to 1 million in just one year – a remarkable jump by any measure.

But Twitter needed more than a large number of apps hooking into its service. It needed new sources of revenue and was looking to build an advertising business. Open APIs made that difficult, however. Developers were using them to create apps with different user experiences, so serving and tracking ads across a million different apps was challenging, to say the least.  It needed consistency to make the advertising model work.

So in 2012, Twitter changed course on its API policy. It began limiting access to its APIs and putting user caps on non-Twitter applications, a move that alienated some third-party developers.

The move worked to jumpstart Twitter’s advertising business. Whether it was worth it, however, is a matter of debate.

It may be that controlling access to APIs is the only way to create a sustainable business model for a consumer-facing communications service. On the flipside, developers are the lifeblood of any platform or service. Irritating them can have negative consequences that play out over many years.

There are no right or wrong answers here. But anyone looking to create a business model based on APIs should be aware of the trade-offs between technology liberation and control, and between investing in a developer community long-term and turning a quarterly profit. As Twitter has shown, it’s not an easy path to navigate. Tread carefully.

Image credit: MKHMarketing

Posted in D&B Data Exchange, Strategic Partners by Lisa Petrucci

Lisa Petrucci is Vice President of Dun & Bradstreet Global Alliances and Partnerships.

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