This article was published 14 years ago
SXSW 2010

Twitter has a great/dangerous business model

Austin, tex.

Never mind the new @platform, the real story that came out of the Twitter keynote at the South by Southwest conference was a hint at how the company will generate revenue: by licensing user’s tweet to third-party sites like Bing, Google and Yahoo.

Williams noted in his keynote that “it was a tough decision” and the company debated whether this was the right direction for Twitter; noting that some employees were not no-board with the idea.

“It was a tough decision (to license users’ data to third-party sites) but it was a good plan to license all data to everyone,” Williams said.

Twitter already has agreements with Google and Microsoft and recently announce an agreement with Yahoo. It is expected that more agreements will be made with Twitter because many companies want access to users’ tweets to see what people are saying about their company and/or products.

And many companies will be on-board with the new business plan.

What is unclear is how Twitter will deal with privacy of users’ tweets. I asked Evan Williams about the privacy issues via Twitter – of all places – and his response was that users’ account will not be index depending on the settings are set in the account.

“If you you protect your account in settings, you will not be indexed,” Williams tweeted to ControlAltTV.

I asked a follow-up question on how – or if – Twitter will inform users that their tweets are being index. Williams did not respond to the question as of this post.

There are two sides to this type of business model. The bad side is that Twitter is letting third-parties access to your tweets. The right way Twitter should handle this and not have to deal with the public backlash that came from Facebook and Google Buzz, the company should disclose to every Twitter user that your tweets are being index and made public to groups that have paid for the access.

At the SXSW conference in Austin, Tx., Microsoft researcher Danah Boyd said in her keynote that privacy is not dead and users want control of their social media accounts.

“People care very much about privacy, no matter how old they are,” Boyd said at the opening remarks keynote. “The challenge is that what privacy means may not be what you think…Fundamentally, it’s about having control over how information flows…When people feel they don’t have control over their environment or their setting, they feel as though their privacy has been violated. And they cry foul.”

The good side is that this is an excellent business plan and the company has finally unveiled how they will generate revenue.

Hopefully, Twitter has learned from the mistakes of others because they have an excellent business plan and will generate money for the company. Depending on how this goes, expect other companies to copy this plan as well.