The Twitter ecosystem may be changing constantly, but most of that comes on the back of individual developers and outside companies. They beat on Twitter APIs to create new products that may win them glory, recognition or cash. Over the past month, though, Twitter itself has gotten into the game, releasing or announcing a handful of new features.
A new function for "retweeting" (echoing another's tweet to your own followers), changes to how trending topics are managed, and the ability to create lists are new tools intended to engage users ... on the Twitter.com website. Considered within the context of Twitter's changed terms of service this year, the upgrades may be part of a broader ad-based revenue plan.
Part of what has made Twitter so successful has been the developer community, which has put together tools that provide an alternative to the Twitter website or the text message to 40404. Unfortunately for the microblogging platform, utilities such as TweetDeck and Seesmic give users full access to the platform without having to engage it directly. So, Twitter gives and doesn't get full reciprocation. Engagement is great: it builds loyalty, adds content and attracts new users. But, all this Twitter use via means other than Twitter represents a lost opportunity for the company, if it plans to make money by serving ads. To pump up ad impressions, Twitter will actually need users to come to its website.
ComScore puts Twitter's traffic at around 20 million monthly unique visitors, and independent service Tweet Stats reports that approximately 30% of all Twitter use occurs off the site. If Twitter served ads on the site, this rate of onsite usage suggests that it's leaving 70% of its potential revenue on the table.
Twitter is great at making money for other companies. It provides content to other sites through integrations (e.g., with Facebook), which boosts engagement, provides an environment for outside application developers to innovate and sell their products -- for example through the Apple (AAPL) App Store -- and has even led to in-stream advertising services, such as Ad.ly and Magpie. Only Twitter, it seems has struggled to find ways to make money on its own creation. The recent moves to license data to search engines -- such as Google (GOOG) and Microsoft (MSFT) -- have led to a revenue stream, but other ideas, such as corporate accounts and ads, haven't been dismissed.
The new features also show that Twitter is continuing to advance its product, a necessary play for the growing environment that has generally publicized little more than increases in its user base. The simple tool -- which is loved for its simplicity -- does need to provide a fairly regular stream of unobtrusive new features in order to keep the buzz alive.
The new retweet feature exemplifies the sort of new features that can benefit Twitter. Rather than manually indicate that one is retweeting someone else's statement with the typing of "RT," Twitter uses a small logo to indicate that something has been retweeted and shows how many people (and who) have done so. It doesn't get in the way and leaves the site's elegance intact. This functionality is available on many sites that use Twitter to promote their content (including BloggingStocks) ... and has been for a while. So, it was definitely time for Twitter to wake up on this one.
The company is also changing its "trending topics" feature to give it more control over what's displayed, keeping the trivial, annoying and absurd to a minimum. With lists, users can categorize incoming tweets. The organization of incoming information should make it easier for users to keep track of what's important to them as the number of people they follow grows.
These features, though available to developers of outside applications, are designed to attract eyeballs to the website itself, not just pump up the already high and rapidly increasing user number. After all, users are effectively worthless for an ad-based business if they don't see the pixels. But, we won't know if this is really the driver until next year, since Twitter says it won't serve any ads in 2009.