A lot of talk this morning about the downfall of Twitter servers during the Steve Jobs Keynote speech. Apparently the Twitter servers couldn’t handle the traffic that build up. Especially people who were depending on Twitter to live blog the event complaint about this.
Dave Winer suggests that Twitter ought to be decentralised, to prevent it from breaking down. And at the same time he thinks it might be rebuild using the rss technology to make it more sustainable. From a user perspective this is probably a good thing to do. By decentralising it would seem that Twitter would never break down like this, allowing people to continue to use it, even during a hail storm of Tweets.
Scott Karp rightly says that the people that have invested in Twitter will not be too keen on decentralisation. The major asset Twitter, or any other web service, has is their centralised user database. And they won’t be willing to give that up so easily. If the Twitter team ever wants to be able to execute a positive business case, they need it to be centralised. The decentralised version will appear, no doubt about it, but there is another strength that Twitter now seems to have. It’s current brand strength is high. There are already other Twitter-like services around (Ponce Pownce, Jaiku), but even though these services have sometimes cooler features, they aren’t nearly as successful as Twitter.
I think that the current Twitter business model isn’t sustainable. It depends on the centralised user database and has already shown that this centralisation comes at great cost and reliability. I suspect that Twitter was designed to be bought by Google. That would make a lot of sense. Not only does it fit Google’s business model very well, I also think that Google is probably one of the few companies that could actually scale Twitter to a global level. Let’s not forget that Twitter currently has less than a million active users. It isn’t a big service. It’s users are mostly tech savvy people working in web 2.0, Internet or media companies. Bloggers make a great fuss about it, but my children, wife or family friends have never heard about it. Since they failed correct execution of their business model (get bought by Google, Google bought Jaiku instead), it is time for them to rethink what Twitter should be about. The Twitter team needs to reconsider how to start making money out of the service.
Twitter is a simple, cool, easy to use, messaging system allowing people to share their thoughts and follow other people’s thoughts anywhere and anytime. It is in that sense one of the most simple, yet brilliant, (mobile- and) web services around right now. It has enough critical mass now to scale it to much larger amounts of customers. Now all the Twitter team needs to do is start building a sustainable business model., and fix a few minor issues in the service. Not one that depends on a centralised database, but one that monetises user value. That is the only asset in the end that will make Twitter tick. They will need to find a way to decentralise it, and still make loads of money. I could imagine Twitter becomeing the new messaging system for any web 2.0 service. Why build your own, get it wholesale fromt he Twitter team. And remember, people are always willing to pay for value they receive.
I will keep on twittering and not minding it breaks down every once in a while. It is not a life depending communication service. The bloggers out there screaming in outrage should start using Twitter for what it is. A simple, easy to use, fun, and brilliant messaging system.
BTW, if you are interested, you can find me here on Twitter 😉
@vanelsas 
Nice post! I agree that Twitter should work on their business model. Even so, it’ll take some time for the majority to start using Twitter, whether us users & bloggers evangalise it or not. Only then will a business model be sustainable, in my opinion.
The only problem with the sell to Google plan is that Google bought Jaiku.
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Hi Alex!
I believe that Fred Wilson (and Union Square Ventures in general) know what they are doing. To me it looks like Twitter is only a part of smth, if you add Feedburner and del.icio.us (which are all in UnSqr portfolio), you might get the same thinking… My english is a mess as usual 😉
@buckpost, that is precisely why I suspect execution of their initial plan failed (although I don’t know their plan of course, we should ask Fred Wilson probably). I’m sure they would have liked to be bought by Google, instead of Jaiku. But Jaiku has RSS feeds, and presence, which is probably why they were more attractive to Google. I wrote about that when the deal was announced: https://vanelsas.wordpress.com/2007/10/09/facebook-will-be-no-match-for-google/
@Kirill I understand what you mean. And yes, Fred Wilson is a pretty smart guy. Actually I think they have gold in their hands, as Twitter provides value to its users (which is much more than most web 2.0 services). But they need to capitalise that value and that requires some good thinking and probably some radical business model adaption.
What about Twitter makes you think they have gold on their hands, Alex?
— it’s easy to copy. The hardest part to replicate is the network, but many companies already have a much larger network to which they can deploy similar technology.
— it isn’t sticky in general. Do a search for any name and you’ll see that 19 out of 20 results hasn’t updated in *months*. Alexa shows flat growth over the last 6 months, so I think the viral coefficient isn’t there either.
— no revenue model. Not only that, have any of their API partners proven a sustainable biz model either? Is there ANY money in site, other than acquisition? (BTW, I hardly expect twitter would earn anything more than $.05 CPM on ads.)
— a non-trivial cost model. Not only all the servers but all the SMS costs as well.
@Jordan. I believe in general that people always want to interact with other people. They spend lots of money SMSing with family, friends, colleagues etc. already. And they pay for it, because SMSing provides them value. Twitter is merely a simple, yet elegant way to extend your reach from mobile to Internet, and from close and personal friends to “anyone you follow or follows you”. I believe that people would easily be willing to pay for that. Just to be able to send a “group” sms from your mobile to your Twitter friends, and getting into a “group” SMS conversation that way provides value. Twitter should have, in my opinion, ask a small SMS fee for uploading from mobile to the Internet as a starters. Maybe avery small fee for receiving SMS on the mobile too (altthough that could easily be sponsored). And they should become the plumming for any web 2.0 service that wants to integrate mobile into their web service. So Twitter should create the proper B2B API’s too. Twitter needs a large and possibly decentralised scale to start making revenues. I don’t think they should get into advertisement, it screws up the elegant 140 char messaging. But they should be thinking distribution, large scale, with customers that are happy to use it and pay part of it. And a B2B revenue model to go along with it. I can’t imagine people like Fred Wilson haven’t thought about that though? Maybe we should ask him 😉