Sponsored tweets are a marginal business model, and Twitter can’t support it’s growth for even selling stock and licensing the firehose (especially when companies like Google decide to now longer pay for that license).
Media companies are obsessed with Twitter, since everything important appears there first, and with skillful use, publishers can dramatically increase the click rates on their URLs, micronized for the Twitter stream.
Twitter could develop a huge business, based on developing the right set of tools for media companies (as well as any companies interested in monitoring brands). And it appears that they are moving in that direction, as indicated by the recent purchase of Backtype:
We’re thrilled to announce that BackType has been acquired by Twitter! We’ll be bringing our team and technology to Twitter’s platform team, where our focus will be developing tools for Twitter’s publisher partners.
Our vision at BackType has always been to help our customers understand the value of engagement on Twitter and other social platforms. We also created BackTweets to help publishers understand the reach of their tweets and content, who they are reaching, and how Tweets covert to web traffic, sales and other KPIs.
Joining Twitter gives us the opportunity to bring insight to tens of millions of publishers around the world that are using Twitter to communicate and connect with their audience. We’re also excited to bring our technology (especially Storm) to Twitter where it can have a big impact across the company.
What happens to BackType?
The BackTweets product will now be offered to current users for free. However, as we begin to focus on our work at Twitter, we will not be accepting any new registrations for BackTweets, and we will discontinue the BackType product and API services.
I enjoyed Backtype in the early days, but couldn’t afford the expense when they closed their free accounts. Now, those that paid for the premium accounts still have access to the service, but that seemes to be going away, and the Backtype team are likely to be developing new Twitter product for publishers.
They also mention Storm – a real time processing technology they developed – and how it might be used across the board at Twitter. Their description of Storm is both a bit grandiose and fairly cryptic, but in summary, Storm is a a distributed, reliable, and fault-tolerant stream processing system, capable of scaling in a parallel hardware set-up without reprogramming.
Considering that Twitter is generating billions of tweets each month, doing any serious analysis of the twitter stream is fairly compute intensive. Here’s one use case, based on Storm’s distributed remote procedure call (RPC) system (my clarifications of technospeak in brackets]:
An example of a query that is only possible with distributed RPC is “reach”: computing the number of unique people exposed to a URL on Twitter. To compute reach, you need to get all the people who tweeted the URL, get all the followers of all those people, unique [identify] that set of followers, and then count the number of uniques [sets]. It’s an intense computation that potentially involves thousands of database calls and tens of millions of follower records. It can take minutes or worse to compute on a single machine. With Storm, you can do every step of the reach computation in parallel and compute reach for any URL in seconds (and less than a second for most URLs).
This sort of processing is exactly what media companies and brand managers want. The editor of the NY Times would like to know everyone that saw any URL referencing a NY Times story, and what, if any, action they took once they saw it. The cascade of those actions, and the reactions of other, downstream users, is of immense value.
And it may be that Twitter sees Backtype’s technology as a way to exploit that value, as well as acquiring the team to assist in scaling up to that sort of computation challenge.