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the [Google] deal, and I said, 'I'm going to throw up,' " Stone says.
"He texted back, 'I know.' "
With the deals, Google and Bing were acknowledging Twitter's
power. The company has helped define a new development: the
real-time Web, in which information is generated and consumed
almost instantaneously, with social networks, blogs, and other news
sources operating in increasingly interlinked ways (CNN Breaking
News, for example, has nearly three million followers on Twitter).
"Twitter has provided a new building block for the social Web," says
Jonathan Zittrain, cofounder of the Berkman Center for Internet
and Society at Harvard University (see "Twitter and the Real-Time
Web," p. 56). "Amidst the clamor of 'Just had a great bowl of soup' and
other trivialities there can be mined some amazing information."
But the question remains: how can a simple technology that's
become a crucial part of the Internet be turned into a cash cow?
Last September, the company reportedly gained more than $100
million in new funding, atop earlier rounds totaling around $60
million. (Returning investors included Benchmark Capital, Insti-
tutional Venture Partners, Union Square Ventures, and Spark
Capital; the new players joining them included T. Rowe Price
and Insight Venture Partners.) "It definitely feels like there is a
shift occurring on the Web---and we think it's a multibillion-dollar
opportunity," says Brian Pokorny, a partner with SV Angel in San
Francisco, which has invested in Twitter and other companies
involved in the real-time Web.
But to make any business model succeed, Williams says, Twit-
ter must keep attracting new users---and prove that tweet-borne
information is actually useful. "We are honestly still focused on
'How do we create more value?' " he says. "We have all of this con-
tent talking about what's happening in the world right now, and we
think there is a lot more value to be gained by users, giving them
the right content at the right time. That will lead to advertising
and revenue possibilities, but those are completely dependent on
people getting value out of it and businesses getting value out of
it. But we don't think we are there yet."
The deals with Google and Bing were, therefore, crucial first
steps---not only toward bringing in significant revenue but, poten-
tially, toward helping show new legions of users the value of Twit-
ter. Just what Twitter might devise as a business model, however,
is impossible to tell, says Randy Komisar, a partner in the venture
capital firm Kleiner Perkins Caufield and Byers (which has not
invested in Twitter). Will it be keyword-based advertising, sale of
market research data, placement of sponsored tweets, or some-
thing else? "The speculative game is pointless," he says.
A BILLION TWITTERERS?
Last July, a set of purloined documents laid bare Twitter's agony
over how to grow as a business. TechCrunch, a technology-
business blog edited by the Silicon Valley gadfly Michael Arrington,
posted a remarkable trove of internal Twitter business docu-
ments, obtained by a hacker who used a stolen password to enter
an employee's Google Apps account. (The TechCrunch posting
remains live today.) The documents included meeting notes that
captured the angst Twitter felt even as the number of users was
skyrocketing, early last year. There was fear that Facebook would
coöpt the Twitter model and that Google would "kick our ass at
finding the good tweet." The brainstorming was endless: the man-
agement team floated ideas from giving away phones preloaded
with Twitter to developing a "TV Twitter." They fretted over how
to keep employees happy. So much ground was covered that it
wasn't possible to discern any one strategy.
But if a single strategy did not surface, grand ambitions did.
"What does a completely relevant product look like for a billion
people?" one unsigned note wondered. Most striking, the pilfered
files included projections that by the end of 2013, not only would
Twitter have a billion users, but it would take in $1.5 billion in rev-
enue and $1.1 billion in net earnings---and become "the pulse of the
planet." In our interview, Williams would not elaborate. "It's clear
there are a lot of ways to make money," he told me. "We want to do
it right. We want to do it in a sustainable and scalable way."
Twitter is hardly alone among online social-networking sites in
its struggle to find a viable business model (see "Social Networking
Is Not a Business," July/August 2008 and at technologyreview.com).
As Williams suggests, the path to technology commercialization is
rarely an obvious one. It wasn't Google's search technology but its
success in selling ads based on keywords that fueled the company's
growth. "We always think of these companies as taking a direct line
from A to B to C," Komisar says. "But if you look closer, what you
see is how crooked the line is that they have to navigate."
Before Twitter's birth nearly four years ago, Williams's big score
was his creation of Blogger, a simple-to-use blog hosting service
that Google bought in 2003. Blogger was not the original idea but,
rather, a by-product of a complex project-management tool for the
Web that Williams was trying to develop at a startup called Pyra
Labs (see "What Is He Doing?" November/December 2007 and at
technologyreview.com). Similarly, Twitter itself was born at Odeo, a
Williams-founded startup that was trying to develop a way to dis-
tribute podcasts. There, an engineer named Jack Dorsey created
a messaging tool---the genesis of Twitter---that he thought would
be good for dispatching bike messengers or emergency services.
After Apple crushed Odeo's audio ambitions by o ering compa-
rable services on iTunes, Dorsey, Williams, and Stone bought the
company and eventually spun out Dorsey's tool as Twitter. (Dorsey
is now Twitter's chairman; Williams is CEO.)
Google engineers explain real-time search, and Twitter s
founders reflect on the site s popularity:
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