Why is Twitter doing this?
To be fair to Twitter, there has been plenty of warning that some of these changes would be coming. But, clearly, no one foresaw the extreme measure of putting a hard limit on the number of users a third-party client can have.
Which brings us to why Twitter is making these changes? The short answer, advertising revenue. Twitter has caught the imagination of users across the world the way very few websites have. However, it has struggled to translate its large mindshare and growing user base into any kind of substantial revenue.
Twitter has rarely discussed its numbers in public, but digital media analysis firm eMarketer estimated in January that Twitter's revenues could reach $260 million in 2012 and $540 million in 2014. Compare that to the $3.7 billion in revenue that Facebook generated last year. (Source)
Twitter has tried a few revenue options - advertising, sponsored tweets, sponsored trends, amongst others. The audience that sees these messages, and the way they seem them, is greatly impacted by the medium (or the client) that they use.
For example, my favourite client may choose to "bury" the trending topics somewhere in the UI, thus robbing the sponsor of the said "trending topic" the mileage it would have got if I was using the "official" Twitter website or client, which, of course, would give prominent placement to its sponsors.
Now let's say 50% of Twitter users prefer to use non-official clients. This means that the chance that advertisers' message is reaching the intended audience is greatly reduced. Certainly most "geeks" and "power-users" prefer using various third-party apps, and though they may not represent a large part of the total user-base, they are the ones that play a huge role in keeping the conversation going on Twitter. It is this group that the advertisers are targeting when they shell out the big bucks, not the spam bots or users with 3 tweets and 0 followers.
Unfortunately, it is this group that Twitter is going after with their API changes. Twitter is hoping if it makes it inconvenient to develop third-party clients (or certainly popular third-party clients), the quality of third-party clients will drop, and people will be forced to shift to the official clients.
Why this would be a wrong move
Twitter's move smells of desperation mixed with a dash of misplaced hubris. Sure, it's within its rights to explore various revenue streams, and having everyone use the official clients seems like an easy way to do this, but it's Twitter that stands to lose in the long term, should this plan go through.
Third-party clients like Tweetie (acquired by Twitter), TweetDeck (acquired by Twitter), Tweetbot, and countless others, are an essential part of the Twitter experience. Without fully-functional clients such as these, Twitter would be a lesser, and certainly a more sparsely populated, place.
I, for one, can't imagine using Twitter via only its website. Sure, it's great for an "emergency", but the clients that I use (Echofon on Mac, Tweetbot on iOS) kick its backside, both, visually and functionally. What would I do without Echofon on Mac; use the official client? No chance! I'd stop using Twitter altogether before switching to that monstrosity of a client, that even Twitter doesn't love, given it has seen no updates for 1 year, 2 months and 16 days!
You may think people like me, who say they'll stop using Twitter without third-party clients, would represent a small percentage of the total Twitter population; one that Twitter can safely ignore. Think again. One of the biggest reasons why a lot of users love Twitter over, say, Facebook is the way the former has embraced third-party clients. While there are apps that let you check Facebook updates, and post updates, the only way to get the complete Facebook experience has been the Facebook website as well as the official mobile apps.
Contrast this with Twitter's approach (until now). Don't like the official website? Here's something awesome that these other guys built. And another. And another. Users have literally hundreds, if not thousands, of options to choose from in terms of how they want to consume, and interact with, Twitter. You are sure to find a Twitter client that suits your need if you look long enough. Contrast this with Facebook - here's the official website, here are the official apps - if you don't like them, you have these extremely crippled other options. Do you want to use those? No? Didn't think so, welcome back and enjoy the official website and apps!
This is what Twitter wants to become. It wants you to use their website and their apps, no matter what platform you use. So it can make sure you see their ads. Twitter thinks it can get away with this because it is big enough to ride out the backlash, and any decline in the user base that may result from the move. Think again Twitter.
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