Twitter grows up: Take a peek inside

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- What a week for Twitter.

The mircroblogging firm made nearly a dozen announcements this week, marking a huge shift in Twitter's business strategy, starting with the fact that it now actually has a business strategy.

At its developer conference, codenamed Chirp, the company unveiled promoted tweets, new official mobile apps, an enhanced geo-tagging feature, a proprietary link-shortening function, live search on Bing and the sale of its archives.

"Twitter's been under a lot of pressure to be a more transparent business," said Augie Ray, senior social-networking analyst at Forrester Research. "Now the company has come to a point in its maturity where it's starting to operate much more as a business and less as a startup."

The new moves aren't without critics. Some customers have found the promoted tweets to be intrusive. Third-party app developers are worried that Twitter is trying to put them out of business. And location-based apps like Foursquare and Gowalla can't be too pleased that Twitter is planning to launch a similar service.

But Twitter has also been scrutinized for taking too long to unveil a roadmap. Developers weren't sure where to invest their efforts, and analysts grew frustrated wondering when the company was going to grow up.

It appears that time has come.

Promoted tweets: By far the most significant announcement. When users search with select keywords, a tweet from a company that bought those keywords will appear at the top of the feed. Companies that currently feature ads on the site include Best Buy (BBY, Fortune 500), Starbucks (SBUX, Fortune 500) and Sony Pictures.

Though some Twitter users predictably reacted negatively to the announcement, Ray said most of the early buzz from consumers was fairly supportive.

Though the current model is still in the experimental phase, the company is hoping to succeed by making the promotional advertising more closely reflect individual users' interests.

Ensuring Twitter remains consumer-driven and not overly corporate is key to its survival, said Bob Pearson, president of the Social Media Business Council.

"The reason Twitter is successful is because it has allowed customers to find what's relevant to them," said Pearson. "If Twitter starts deciding for people what's important, that's not going to work."

Mobile apps: Twitter recently unveiled an official BlackBerry app, and bought the most popular Twitter app for Apple's (AAPL, Fortune 500) iPhone, called Tweetie. The company also plans to soon release an official Android app.

Twitter had previously relied on third-party developers to allow mobile users to access their Twitter accounts on their phones. Apps like Twidroid, Tweetie and UberTwitter were some of the most popular, but there were dozens of others.

It comes as little surprise that having no official mobile app was a barrier to new customers. When people searched for a Twitter app, many were confused about which one to use.

While an official Twitter app hasn't made third-party developers too happy, Twitter made it clear that those developers are still hugely important.

"It's not a coup against developers," said Ray. "It's absolutely clear that Twitter is very committed to improving its platform for the development community."

Geo-tagging: Another big announcement was the unveiling of a "Places" function that would better allow users to see where tweets were coming from.

Twitter will keep a database of restaurants, bars, parks, stations and other public arenas. Developers use that data to create tools like check-in, similar to other location-based services like Foursquare and Gowalla.

Though some believe this poses a direct challenge to some of the more entrenched location-based services, Twitter argues that the new functionality is more of a complementary service.

It's more likely that Twitter would use the information to provide more relevant tweets about a specific area or place than hand out virtual points, badges or rewards like Foursquare's check-in.

Link-shortening: Since Twitter only allows users to post 140-character messages, URLs can take up a large chunk of the space for tweets.

Services like bit.ly have become popular ways to shorten links to post in tweets. But using those services is cumbersome because users have to go outside Twitter's world to create those links.

Like with geo-tagging and mobile apps, the announcement made some developers nervous about the viability of their link-shortening services. But the barriers to creating link-shortening were so small (just register a two-character ending) that the business model of those services was questionable anyhow.

Archives: Twitter sold the rights to its archives to the Library of Congress, making them searchable on Google (GOOG, Fortune 500).

All public tweets, dating back to the very first one on March 21, 2006, are now hosted in the government's Library of Congress.

Users can access the archive by selecting the "Updates" option on Google's search page. The new feature adds a timeline at the top of the results page that shows the relative volume of tweets about that topic.

Live search: Lastly, live Twitter feeds began appearing in Bing search results pages this week. Twitter feeds have already been showing up in Google's search results for awhile, which served as the first source of revenue for the young company. To top of page

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