Twitter has plenty of venture capital in the bank – enough from the outside looking in to let it operate for a couple of years without having to worry about generating a dime of revenue.
Meanwhile, the Twitter ecosystem continues to grow and evolve as third-party developers create new and interesting services using Twitter’s API. The three hottest “markets” are search (Scoopler, Twazzup, etc.), publishing (Tweetdeck, Seesmic, Splitweetl) and photographs (TwitPic, YFrog, TweetPhoto).
What’s interesting and puzzling is as more services are created, Twitter has stayed pretty much the same. Sure, it recently introduced a new way to manage friends and followers but if Twitter was ice cream, it would be vanilla while the rest of the market would be Ben & Jerry’s.
So, here’s a couple of questions:
1. Why has Twitter remained so unidimensional?
2. Why is Twitter is averse to acquisitions. The biggest deal it has made so far was Summize, a search engine, a year ago.
With Twitter growing so quickly, perhaps the company looks upon acquisitions as distractions at a time when it still needs to harden its infrastructure.
Maybe acquisitions aren’t part of the overall mix if Twitter can develop the services it needs internally such as analytics.
Twitter could do some serious wheeling and dealing without spending a lot of cash. There are no lack of popular services created by individuals, who would be happy to take some Twitter cash and be part of the Twitter team.
For example, what about Tweetdeck, which just celebrated its first anniversary. Tweetdeck has about 20% of the publishing market – the same as Twitter.com. Jesse Stay suggests Twitter will purchase TwitPic, the most popular photo-sharing services.
Much like Twitter’s mysterious approach to creating a business model, M&A is another thing that makes you scratch you head when it comes to Twitter’s strategic direction.