Daring Fireball has a great post focused on a question that should get more attention: Who’s actually using Twitter.com any more?
As important, what does the rise of third-party clients such as Seesmic, TweetDeck, Splitweet, Tweetie, Tweetfon, et al mean for the future of Twitter as a business?
Here’s the thinking: all these third-party companies are – as Daring Fireball points out – creating services with much better UI than Twitter, which has only launched incremental improvements to Twitter.com.
As it becomes obvious to Twitter users there are better alternatives, Twitter.com could become orphaned by the Twitter community.
So, why does that matter?
For one, if Twitter has any interesting/aspirations in leveraging Twitter.com as a place to generate revenue (e.g. display relevant/contextual advertising), then Twitter.com’s appeal to advertisers declines as it becomes less of a destination for Twitter users.
Meanwhile, TweetDeck, for example, could become more attractive as advertisers recognize its potential, in part, due to a user-friendly interface that’s advertising-friendly.
You could make the same argument for Twitter-related search. While Twitter’s own search engine still seems to rule the roost, there are a growing number of rivals such as Twazzup (see my review) attracting more attention. The more people use these alternative, the opportunity for Twitter to capitalize monetarily on its own search engine declines.
Given these two realities, how can Twitter leverage the fast-growing Twitter ecosystem so it can start generating enough revenue to justify the venture capital it has raised?
To me, the obvious option is Twitter’s API. If hundreds, if not thousands, of companies are using the API to create services that people are using – and advertisers and consumers – may find appealing, why not charge for the API?
It seems like a no-brainer if Twitter wants to pick some low-hanging revenue opportunities. Twitter could sell the API as a tiered or pay-as-you-go basis. Twitter would have to carefully structure this program so it can keep the Twitter ecosystem alive and well but “there’s gold in them thar hills” that Twitter could easily mine.