Wednesday, January 21, 2009

Is Twitter the new Apple?

Incidentally, I promise that this post has nothing to do with Steve Jobs' health.

Louis Gray wrote a post which decried Twitter's recent changes to API access. Turns out those changes adversely impact SocialToo, and Gray happens to be an advisor to SocialToo, so he naturally shared his opinion on it.

Dave Winer also caught Gray's post and linked to it via a tweet. But his preface to the link was interesting:

The problem with Twitter is it's both a company and a platform. It can only be both for so long.

Now I realize that conversation is for sissies, but Winer's tweet provoked a thought in my brain.

Name one other Silicon Valley firm which has consistently been a company and a platform. Well, there are probably several, but Apple (formerly Apple Computer) has been well-known (or notorious) for this behavior.

I worked for a developer of Macintosh educational software in the 1980s, so I was around for the first years of Apple and the Macintosh. And, although I had left the company by the early 1990s (ironically, as they began to port their software to Windows), I followed Apple's next steps:

At the shareholder meeting on January 26, 1994, Apple announced that it would license its upcoming Power Macs by the end of the year. Apple had trouble signing up even one licensee. Potential cloners questioned Apple's commitment to long-term licensing. After a number of concessions and much hand wringing, licensees finally came onboard and began selling Mac clones in 1996. Cloners included Umax, Motorola, and Power Computing.

But then Apple acquired NeXT, and Steve Jobs (who had left the company in the 1980s) came back.

When Steve Jobs returned to Apple in 1997, many of the cloners began to worry about their future. During a fireside chat at Apple's Worldwide Developer's Conference (WWDC) on May 16, 1997, Jobs asserted his belief that clone vendors should pay more for the privilege of making Macs. Instead of a flat fee of $50 per unit, the price should be based on the volume and price of computers sold. He referred to cloners as "leeches". It was clear that Jobs was no fan of licensing.

So Apple pulled back from licensing, and because of strong customer sentiment for open systems, Apple died a miserable death.

Not exactly. Apple seems to have done pretty well in the years since Jobs' return, despite releasing other closed products such as the iPod and the iPhone.

So it certainly is possible for a company to be both a company and a platform. And there are advantages to such a strategy, namely the fact that you dominate your sector in the market. And while your sector might be small, Twitter use has been increasing dramatically (nearly 1000% in the last year), so perhaps they can keep things locked up and still survive.

Or Winer (and others) might be right, and Twitter is throttling itself.

What do you think?

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