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Hey Twitter, you are a media entity now — embrace it

In an informal chat at Twitter headquarters on Thursday, chief executive Dick Costolo talked about some of the numbers behind the service (as Erica reported earlier), including the fact that the network has over 100 million active users now. That may be a long distance away from Facebook’s more than half a billion, but the fact is that Twitter isn’t really competing with Facebook — it’s not really a social network, but a real-time information network. In other words, it’s a media entity, and the sooner it starts living up to that reality the better.

People like to lump Twitter in with Facebook as a social network, and there are definitely similarities between them — users can obviously distribute information on Facebook in much the same way they do on Twitter, whether it’s just text or links or photos or videos. But Facebook puts much more focus on the social aspects of its network, such as games and birthdays and so on, while Twitter is just short bursts of information. As Costolo likes to stress, one of the service’s main strengths is its simplicity.

That’s something Twitter gets criticized for — the fact that it isn’t easy to carry on a conversation, or put together a coherent narrative from such a rushing stream of information (which is why tools like Storify are so useful), but it is also the network’s greatest strength. It allows users to send information quickly to a large group of followers quickly and easily, whether those followers are looking for personal updates or details about a news event like the earthquake in Japan. That’s why expanding the 140-character limit would be such a mistake, as I’ve argued in the past.

It’s an information distribution system, like a newswire

So what Twitter has is this ever-growing stream of text and links and photos. In a sense, it’s an information distributor — like a newswire — except everyone who uses it is constructing their own stream of news. So how do you monetize that? You can charge for access to the “firehose” of that data, which Twitter is doing, but has mostly outsourced to companies like Gnip. Costolo said during his chat on Thursday that the company isn’t really interested in building that business much bigger than it already is, which makes sense because there’s probably not a lot of money in doing that.

You could also build analytics around all that data, the way that companies like Radian6 and others have, to try and tell brands and businesses who is saying what about them and when. That’s not a bad business, and Costolo suggested that Twitter is interested in doing more of that, or possibly partnering with others. But that’s probably not a huge business — and it’s certainly not a business that justifies an $8-billion or $10-billion market value, which is what Twitter reportedly has as a result of its latest round of financing.

So what else is there? There’s the media business — and that’s where Costolo (who used to run another information-distribution business at Feedburner) has said Twitter is placing most of its bets. In other words, on advertising. But isn’t the advertising business going down the drain and taking newspapers and old web publishers like Yahoo and AOL with it? Yes. But look at where the ad revenue is going: to social networks like Facebook and to Google, since both can target ads in a way that traditional publishers can’t.

Targeting the “interest graph” and monetizing that

That’s something Twitter can do as well, but in the process it will have to become even more of a media company than it already is. It has this huge ocean of data coming in that it can analyze and make sense of — and it can carve it up however it wants. Why leave it to others to curate the news or other content coming from Twitter using tools like Percolate (which is now powering a news offering from Reuters) or Storify or even Flipboard? Why not make it easier for users to customize the stream of information they see, the way some are trying to do with Zite or Paper.li or Summize?

If it wanted to, Twitter could easily publish customized news and information products using the billions of tweets it sees, and an analysis of the trending topics and other data that comes with that. It could even create targeted mini-networks, like the kind that StockTwits (see disclosure below) has created around a specific niche or market. That’s the kind of thing that would likely interest a lot of advertisers and brands — and likely more than just slapping a “promoted tweet” at the top of a user’s stream.

The bottom line is that Twitter shouldn’t really be looking at Facebook or even Google+ as competitors, because at heart it is an information company, not a social network. A better comparison would be something like Thomson Reuters –a company that runs a newswire, but also has targeted services around specific markets and kinds of information that advertisers and knowledge workers are willing to pay substantial sums for.

Twitter could be the crowdsourced Reuters of the digital age. And having closed a financing round of close to a billion dollars, or what Costolo described as “a truckload of money,” the company now has the financial resources to pursue that future — if it wants to.

Disclosure: StockTwits is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Post and thumbnail photos courtesy of Flickr users See-ming Lee and Si Brindley

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[From Hey Twitter, you are a media entity now — embrace it]

Twitter closing another massive $400M round

Twitter MoneyMicroblogging social network Twitter is in the process of closing a new $400 million funding round, reports CNN Money.

The new funding is the second of two massive $400 million rounds that puts the startup’s valuation at an estimated $8 billion.

The first round, which we reported in late July, was a $400 million direct investment led by Yuri Milner and Russia’s DST (the same investment company that has backed Facebook, Groupon and Zynga). The second round, by contrast, is intended for existing Twitter shareholders who have the option of cashing out on their earlier investment.

Twitter has over 300 million registered users and over 100 million active users since launching in 2006. At least half of all active users log in daily to send 140-character (or less) quick messages, called Tweets. The site is averaging 230 million tweets per day, or over 5 billion tweets each month, according to a blog post published today on the company’s official blog.

Earlier today, Twitter held a press conference led by CEO Dick Costolo, who discussed the service’s revamped back-end, the changing behavior of users, and Twitter’s business plan and revenue streams. For complete coverage of the press conference, check out the recent report by VentureBeat reporter Jolie O’Dell.

Filed under: deals, social, VentureBeat


[From Twitter closing another massive $400M round]

The Science of Sharing

The Science of Sharing: “IMG_3091 - Edited

T. and F. They don’t stand for ‘true’ or ‘false’ anymore. They stand for Twitter and Facebook. They’re in the corner of every webpage we visit, alongside ‘in’ for LinkedIn, ‘su’ for StumbleUpon, and the universally recognized envelope, which represents the archaic sharing system we call ‘email’ – which still accounts for 17% of all Internet sharing.

When we’re surfing the web, we see something we like and click one or all of these sharing buttons without thinking twice. But if you’re a marketer, or a webmaster, or a blogger – anyone that has a vested interest in how many hits are coming in; sharing isn’t just the new American pastime – there are dollars at stake. And one company is attempting to help publishers better understand how encouraging sharing can increase profits.

This is the goal of ShareThis, the largest platform for sharing and influence across the web, which aims to help publishers strengthen their advertising by understanding the people who are receiving their content via shares. Sharing accounts for 31% of site referral traffic, nearly half of what search engines account for. Analyzing not who is sharing, but who they’re sharing it with gives publishers the ammo they need to secure advertisers that will profit from partnering with them.

ShareThis CEO Tim Schigel explains it as such: If I send a link about DIY furniture restoration to my cousin Susie, it says more about her than it does about me. As Susie’s cousin and ‘search agent’, I’m targeting her better than any advertiser could. If publishers understand the people who are receiving their links from sharing, they can secure more effective advertising. By tracking the path of clicks, ShareThis can aggregate pertinent information about the publisher’s audience, thus enabling them to broker more meaningful relationships between publishers and relevant advertisers. Eventually, ShareThis will be able to assign a dollar value to every share.

One website has already nailed down their share-to-dollar algorithm – Eventbrite. As Marketing Director Tamara Mendelsohn puts it, ecommerce isn’t something you’d inherently share with your network – you don’t post the $300 shoes you just purchased on your Facebook wall (or you do, if you’re gaudy). Enter social commerce. The nature of events is that they’re social – you want your friends to come along, you want to hear feedback from people who’ve attended a similar event, you want to know who’s already purchased tickets.

Add to that an interface that encourages both event organizers and ticket purchasers to post events to their social networks, and you have one of the most successful social commerce campaigns on the Internet. Facebook is now Eventbrite’s #1 referral site, surpassing Google and netting Eventbrite 11 clicks and $2.53 per share. How they got the number: “We track the total ticket volume that is driven by each sharing mechanism and divide by the total number of shares that are initiated through that mechanism on our platform. In reality the numbers are probably higher, as some people will just directly cut and paste links to share. We can’t track that, so we know our numbers are conservative.”

Of course, not every social site can be expected to provide a ROI like Facebook (an Eventbrite share on Twitter only nets 0.43). In the case of Eventbrite, this is because Facebook (and Facebook friends) are a lot more localized – your Twitter followers are likely to have a greater geographic spread than your Facebook friends. There’s also that whole “Facebook having 500 million users” part of the equation.

There’s been an undercurrent of dissent toward Facebook in the past few months; stemming from early adopters who claim it’s ‘jumped the shark’. The unfortunate truth is that it’s the most effective social network if you’re trying to garner clicks on your shares – whether you’re trying to share the cutest kitten video ever or an article you’ve mandated ‘required reading‘ for anyone who wants to associate with you.

Of 70 billion shares examined in the ShareThis study, 38% of clicks on shared content came from Facebook (Twitter was only responsible for 11%). If you don’t use social networks to promote your projects or your personal interests, feel free to deactivate that Facebook profile. But if you have even the tiniest incentive to reach an audience, it may be a while before Facebook becomes as irrelevant as some of us wish it were.

Where and how do you share content on the Internet?

(Via The Next Web.)

Rapportive just turned Gmail into a really useful Twitter client

Rapportive just turned Gmail into a really useful Twitter client: “birds

Gmail plugin Rapportive is already one of the most useful tools for anyone wanting to get more out of their email, showing you information from the social networking profiles of people who contact you in place of Gmail’s advertising column. However, today’s it’s added a feature that could make it essential for anyone who uses both Google’s email service and Twitter – it’s essentially turned Gmail into a Twitter client.

While Rapportive previously let you see the tweets of people who emailed you, it’s now a lot more useful. For a start, you can now reply to people via Twitter, and retweet them too, right from Gmail.

There’s even a button allowing you to follow people, whenever you receive an email from someone you aren’t already following. This is particularly useful with new follower notification emails. While Twitter sends you information from a user’s profile within the actual email, Rapportive will display their latest tweets and let you reply right away, saving you the effort of clicking away to a separate Twitter client to find out if it’s worth you following back.

As you can see in the screenshot below, new followers just got a lot easier to deal with – you can see their recent tweets and follow straight back, right from the notification email.

In short, this is a real timesaver for anyone who spends a lot of time in their Gmail and Twitter accounts. While it won’t replace your usual method of accessing Twitter, Rapportive has succeeded in bringing the most useful elements possible of the microblogging service right into your inbox.

If you’re already a Rapportive user, your account will be upgraded to include the new Twitter functionality soon, or you can force an upgrade simply by visiting this URL: http://rapportive.com/twitter. If you’re new to Rapportive, head over to that link too, to get set up with this excellent free service.

As we recently reported, Google has planted itself on Rapportive’s turf with the launch of its own Gmail People Widget. However, the small US-based startup has fought back by rapidly introducing new functionality. If you weren’t already a Rapportive user, today’s new Twitter features should give you even more of a reason to try it out.

Image source

(Via The Next Web.)