Twitter Plays Tony Soprano to Developers: But Why Relationships Matter

"This is business, not personal" is a line that comes right out of the Badabing playbook. We are all supposed to bow before the economic imperative, understanding that actions influencing needs as primal as feeding one's family are always Job One. Except, of course, that we live in a world where the day's hunt is no longer the determining factor in the kids going hungry or not.

In this new, arguably easier world, relationships matter because we have to rely on others to help us prosper. So when companies like Apple, and now Twitter, beat up on their business partners largely because they can, there may well be consequences. Maybe not immediately, but in this economy, particularly the tech sector, people have options. And most human memories remain long. Good will is an intangible. You can not take it to the bank (though many have tried, but that is a story for another time). In the long, strategic run, the trade-off between owning content on your platform versus sharing credit and profits may be a close one as power shifts and tastes change. Matthew Ingram explores the conflict in GigaOm:

"In another shot fired across the bow of the Twitter ecosystem — or another volley in the ongoing Twitter wars of 2011 — the company has come out with new terms on which all developers must operate, which makes it clear that Twitter plans to own the majority of the value in the system, and relegate third-party apps to the periphery. As with the company’s other recent moves, including shutting down misbehaving apps, the response has not been friendly from many parts of the network. And while Twitter can probably get away with this kind of behavior, it is taking a real risk of losing much of the goodwill it has built up over the years.

Critics have accused the company of “nuking” the developers and services that helped it achieve its early growth in its drive to monetize its network, in much the same way that Hunch founder and angel investor Chris Dixon criticized the company last year for “acting like a drunk guy with an Uzi” after it acquired Tweetie. Some have given the company credit for at least laying out the rules in a clear manner with its latest API update, since much of the developer community has been unclear on what was permitted and what wasn’t, but those responses seem to be in the minority.

The point has become clear by now: anyone who is still under the impression that Twitter is the friendly, touchy-feely company that co-founder Evan Williams used to run — the one that admitted it “screwed up” relations with developers by moving too quickly — is living in a dream world. Twitter CEO Dick Costolo may have been a standup comedian at one point, but he is a businessman now, and Twitter is determined to do whatever it takes to come up with a business model to justify the huge valuations it is getting.

As MG Siegler has pointed out, what Twitter is doing is just business and not personal — but there is a reason that most businesses don’t operate the way the Mob does (other than the fact that killing people is illegal, of course). Acting that way, by routinely kneecapping people or setting their businesses on fire, is a risky proposition. Even if you *can* do it, it’s not clear that you *should* do it, especially if some of your business depends on goodwill (as opposed to fear), as Twitter’s clearly does, and especially if a large part of your success is due to that larger ecosystem.

Without the help of third-party apps like Tweetie and Tweetdeck, the company likely would not have been nearly as successful at building the network (and a ready-made client like Tweetie certainly wouldn’t have been sitting there waiting to be acquired). But the ecosystem didn’t just build demand for the network — it also helped build and distribute the behavior that now makes Twitter so valuable: the @ mentions, the direct messages, re-Tweets and so on, none of which were Twitter’s idea originally. That created a huge amount of goodwill, and led to the (apparently mistaken) idea of an ecosystem.

It’s all very well for Twitter to claim ownership of all those things now, since it is their platform. And obviously there are businesses that can get away with being arbitrary or dictatorial — Apple is well known for such behavior, after all, and it is one of the most valuable companies on the planet. But this only works over the longer term if your product is so unique and compelling that people will put up with it. Is Twitter in that category? Perhaps. The company managed to grow at an astronomical rate even when it was suffering repeated outages, because users (including me) were so addicted to it. That may have made Twitter a little cocky about how necessary it is.

It’s also true that there isn’t really much competition when it comes to micro-blogging, or whatever we choose to call Twitter. Open-source options such as Status.net have tried to get traction, and programmer Dave Winer has been lobbying for and trying to jump-start an open Twitter alternative for some time — even before the company made it obvious that it was planning to “prune” the ecosystem. So far nothing has come along that can compete, but Twitter’s behavior could serve to boost those efforts substantially. And there would be definite benefits to an open system — not just in terms of features, but for when governments decide to order companies like Twitter to release user information to the State Department about their espionage investigations.

In the short term, Twitter seems likely to get away with throwing its weight around and dictating the terms on which developers — and users, to a large extent — can access or make use of the network. And maybe the network has grown to the point where none of that matters any more. But sometimes when you bulldoze an ecosystem, what you wind up with is a lot of weeds and a corporate mono-culture in which growth no longer flourishes, and in some cases that growth subsequently moves elsewhere. That’s a risk Twitter seems willing to take — whether it is the right one remains to be seen