The unthinkable has happened: Twitter has decided to make money. Longtime users of the microblogging service, which for years has operated without a viable business model, are anguished at the prospect of paid ads appearing among their tweets. But advertising is just the tip of the iceberg. Twitter's vast and ever-growing data store will be the true profit center, say company execs -- both for Twitter and for independent developers.
Exactly to what extent Twitter plans to make its data available to outside parties remains unclear, but the company's APIs are already accessible for developers to access its services, and last October it signed deals with Google and Microsoft to allow tweets to appear alongside search results. Now Twitter is reportedly developing "analytical products" aimed at marketers who want to mine the Twittersphere for insight into public opinion about companies, products, and brands -- and it's encouraging others to do the same.
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In so doing, Twitter joins a growing number of online companies in creating a new kind of software platform. In the past, tool vendors have offered developers languages and code libraries that gave them access to computing functions in simple, standardized ways. In this new paradigm, however, a platform consists of more than just frameworks and APIs. It also comes prepackaged with a complete, rich data set, and often that data is the platform's most valuable aspect. These new "data platforms" are creating exciting new opportunities for developers, though they are not without their challenges.
Data Mining Like Never Before
It's easy to scoff at the idea of Twitter as a source of valuable data. Among consumers, the divide between the tweets and the tweet-nots is deep, and those who do not partake see little of interest in a service that allows users to post 140-character status updates. But Twitter is not alone in thinking it's sitting on a goldmine. The U.S. Library of Congress recently announced plans to archive all public tweets since March 2006, presumably as an aid to future anthropological research.
The Twitter archive will add to the growing collection of data the U.S. and local governments have begun offering to the public. The most prominent example is Data.gov, a clearinghouse for data feeds from federal government agencies that was launched by the Obama administration last year. The site has already spawned a small commercial ecosystem as vendors offer number-crunching and analytical services to help companies and lobbyists make sense of the raw data.
Of course, Web apps that draw from online public data sources are nothing new. So-called mashups combine disparate data sources in novel ways -- using Google Maps to plot sightings of the McDonald's fast-food chain's elusive McRib sandwich, for example. But companies are only now beginning to realize that high-volume Websites, such as Twitter, present opportunities to conduct data mining on a new and unprecedentedly massive scale.
Previously, only large retailers such as Amazon and Wal-Mart or portal providers such as Google and Yahoo have had access to such large data sets. So far these companies have held their cards close to their vests, and for good reason. Their customer data is a key component of their competitive advantage. Now Twitter and others -- particularly, social networks such as Facebook and MySpace -- are banking that smaller vendors are willing to pay to level the playing field, and they're developing data platforms to make that happen.