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How To Kill Your Ecosystem. Twitter Pulls An Evil Move With Its Firehose

This article is more than 8 years old.

Sad news today that Twitter is cutting off access to its "firehose", the stream of Tweets and related information that have been utilized by third party vendors for years.

Twitter has sold tweet data to these third parties for a number of years. In turn, these partners analyze the data and on-sell insights to interested parties: marketing, and advertising agencies for example. There was a degree of unease last year when Twitter acquired Gnip, one of the vendors that used the data from the Twitter firehose. While Twitter indicated at the time that it would play on a level playing field with the other data partners, since that time Twitter's strategy has changed, and the company is shutting off the data feed. In an email to Re/code, a Twitter spokesperson was frank about the move saying that:

After acquiring Gnip in May of 2014, we decided to bring all data licensing activity in-house in order to better serve our customers and partners

One of the companies making use of the data feed was DataSift. According to related parties, Twitter told the partners a year ago that the feed would be cut off and, since that time, DataSift has been trying to negotiate continued access to the feed. Nick Halsted, the CEO of DataSift wrote on a blog post that:

For several months now, we’ve been working hard to renew our contract with Twitter. The negotiations were promising. At several points, we felt a deal was imminent … This is an extremely disappointing result to us and the ecosystem of companies we have helped to build solutions around Twitter data

The DataSift relationship dates back far further than Twitter's acquisition of Gnip. The two companies have been working together since 2011. But this is a lucrative opportunity. Last year Twitter made $147 million in data licensing. The value that can be built on top of the raw feed by leveraging its Gnip business unit to sell enriched data far exceeds a simple licensing revenue stream.

Twitter obviously needs to find new revenue sources. The Twiter service is, after all, completely free and hence the company needs to make money somehow. The lucrative advertising and commerce areas are two big opportunities and Twitter intends to use its big data business unit to seek these direct relationships with the companies that can use insights from the Twitter feed.

Of course, this is Twitter's right. It does, after all, own the rights to the data feed, as such it has the legal right to do whatever it pleases with the feed, including shutting off third party access. But the legal right is different from the moral right, and many suggest that this is something of a purely commercial (some might say evil) move on Twitter's part.

Twitter has a long history of making moves that are counter to the best interests of its ecosystem. Many years ago when the company bought the Tweetdeck client, many other companies creating a Twitter client howled in protest. Indeed, Twitter has been fairly open about how it views the ecosystem. It has stated clearly that it will cut off companies that "mimic" products, services and experiences that Twitter itself offers.

But the problem is that the sands shift and unsuspecting companies can suddenly become competitive with core Twitter services. Interestingly Twitter recently invested in Dataminr, another analytics vendor who tracks news and financial data from the Twitter stream - perhaps other third party vendors in this space should start worrying?

In a blog post reflecting on the news Steven Willmott, CEO of 3Scale, an API management vendor, waded in to discuss the move. 3Scale is, after all, a company fully immersed in the world of APIs, the programmatic glue that ties applications together. A vendor closing off API access is, therefore, very much in their wheelhouse. As Willmott sees it, Twitter made a mistake with this move and will lose an important innovation layer on top of its platform. Wrote Willmott:

While it makes sense at some level to want to be closer to the consumers of data (that’s valuable and laudable from a product perspective), removing other channels is an innovation bust. Twitter will no doubt do a great job on a range of use-cases but it’s severely damaging not to have a means to enable full firehose access for others. Twitter should really be expanding firehose access, not restricting it:

  • The Twitter and Gnip teams have awesome engineers (we know plenty!), and they’ll continue to produce excellent product and services. However, with all the will in the world, they will not be able to cover all use cases. Business constraints will push them to focus on the most lucrative and largest. Niche cases just won't be served.
  • Few organizations have the capacity to handle the full Twitter firehose or even meaningful slices of it. This means a further a loss of value for the smaller use cases.
  • Many of the most interesting use-cases involve co-mingling (public) data from Twitter and other social sources: this is very hard to do well and just got a lot harder.

Willott draws parallels between what happened to the Twitter client ecosystem after Twitter bought Tweetdeck, and this situation. As he sees it, innovation on the Twitter client effectively stoppped when Twitter bought Tweetdeck and other vendors faded. The same, says Willmott, will occur in this case.

In response to those who would suggest that this is simply market dynamics, that Twitter owns the fire hose and hence can do whatever it wants with it, Willmott wrote that:

This is a fundamental principle of platform economics: Grow the pie, don’t try to eat all of it.

Clearly Twitter has the right to make this move, but whether it is a good thing for customeGrow the pie, don’t try to eat all of itrs, for the ecosystem and, ultimately, for Twitter itself remains to be seen.

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