Twitter searches for golden thread

The Interview
BIZ STONE


Biz Stone believes he has found a way to transform the micro-blogging service into a money-spinner

ITS critics complain about the inanity of its content, its demanding nature, its ability to suck time, effort and attention from already busy lives, 140 characters at a time.

But such criticisms are minor compared with the biggest question facing the micro-blogging service Twitter: can it make any money?

Biz Stone, the California-based co-founder of the increasingly popular service, acknowledges the challenge. But, he assures anyone who asks, they're working on the problem and they're confident they have a solution.

Stone is keen to explain what Twitter is really about; to define its true value and assure users, companies and investors that building an invaluable real-time search service from which a revenue model will inevitably follow is the best strategy.

He acknowledges that in its early days Twitter had a fun and casual tone, reflected in the home-page invitation to users — "What are you doing?" — to share their lives with the world.

"When we started out we thought we just had this fun service," says Stone. "And that's why the early critics said of Twitter: it's not useful."

Stone and his co-creators saw the early incarnation of Twitter as a rudimentary networking service, something you would use to stay in close contact with loved ones or friends. But, he says, the open nature of the network — the ability to follow other people's messages without an existing personal connection — made it different to other social networks.

The founders' own perception of Twitter as purely fun and casual changed as people started to use it in new ways: to organise protests in Iran after a contested election result; to tweet (including photo) about a bridge that had snapped a cable in San Francisco; and to report — before any other media could break the news — that an aircraft had crashed into the Hudson River.

"When we saw it used during emergencies or political insurrection, or even used to enliven live events, we knew it was something bigger, something truly useful," says Stone.

Gone is the fun-and-casual tag, Stone now defines Twitter as an information network for discovering and sharing information about current events. "There's this real-time element to it and the information is very short and quick. If you want to find out what's happening right now you turn to Twitter. Or if you want to report something that you've just seen that is in some way interesting, or you feel that you have to share it — say you've just witnessed an accident — you blurt it out in Twitter.

"We have millions of people around the world reporting on what's going on [around them]. It's a very powerful discovery and search engine for what is happening at any given time."

This evolution from fun to informative is reflected in Twitter's new invitation to users. In November, "What are you doing?" was replaced by "What's happening?"

Being fun — even useful — is not a business model. Not on its own. Twitter can have millions of users — a recent estimate suggested as many as 75 million people have signed up to the service — but without revenue streams such size becomes a drain on resources, even a threat to survival.

Stone several times mentions making Twitter "more relevant and adding value". There's a hint in this mantra of the company's revenue strategy.

"There's all this information in Twitter, right now, that's relevant to you at this point in time and at the location you're currently in. What we need to do is find a way to get that information out of Twitter and into the palm of your hand in a timely fashion. That's the challenge that lies ahead for us."

In fact, Twitter has considerable financial breathing space. Deals with Google and Bing, Microsoft's search service, to pay for real-time access to tweets were reportedly worth $US25 million, making the company profitable for the first time in its less than four-year existence.
The company also recently raised about $US100 million in venture capital to go with $US60 million raised in an earlier round. This suggests a confidence that Stone and co will find a way to turn tweets into gold.

The Google and Bing deals point to the growing importance to the internet of real-time search.
People increasingly turn to the internet for instant information about restaurants, films, Christmas sales, traffic, weather and news updates. That's where Twitter is convinced it will find gold.

But amid talk of revenue and investment, Stone stresses that Twitter serves a higher purpose, that he and co-founder Evan Williams see their creation as being part of a "bigger mission".
That mission, says Stone, is the belief that the open exchange of information can have a positive global impact.

"We've seen the powerful impact that can have, and especially with Twitter, we've seen the good that it can do around the world. So there's a bigger mission in creating these kinds of online communication systems.

"On top of that," says Stone, "we think that these kinds of systems can be very profitable."
Twitter's critics will believe that when they see it.

The hard questions

1 Is there a danger Twitter could be replaced by a competitor before investors see any return on their money? "Our investors know our plan and they're on board with us taking our time and getting it right. They knew who they were investing in and what they were getting into and approximately what the timetable was. There is no pressure from our investors or our board."

2 Were you ever tempted to sell Twitter to Google or Microsoft?
"We had an attractive and useful service, we had enormous growth and people around the world flocking to the service but we had not made a business out of it, so we had only really done half the job. Because we have this philosophy about how we can do good and make a profit, we felt strongly that we wanted to complete the picture and fulfil the business part. We feel that if we can get that done, it's something we really want to do."

3 If you were starting Twitter now, what would you do differently?
"In the early days we offered Twitter over SMS for free and we paid for them. As Twitter grew so did the SMS bill and we had to turn it off. It's not great when you offer a service and then take it away. What we could have done was a better job of arranging for that service."

4 Is Twitter an expensive operation to run?
"It is and it isn't. It depends on what you compare us with. We're not surveying millions of hours of video, like YouTube, but we are processing 50 million tweets a day. It's not as expensive as some, but it's more expensive than running a bookshop."

CV
CHRISTOPHER ISAAC ‘‘BIZ’’ STONE
■ Co-founder and creative director of Twitter
■ Raised in Wellesley, Massachusetts
■ Author of Blogging: Genius Strategies for Instant Web Content (2002)
EDUCATION
■ Northeastern University and the University of Massachusetts, Boston
CAREER HIGHLIGHTS
■ Designer at Little, Brown and Co
■ 2003-2005 Senior specialist at Google
■ Co-created social media services Blogger, Xanga and Odeo
■ 2006 Co-founded Twitter with Evan Williams and Jack Dorsey as a side project that turned into an internet phenomenon


Published in The Age, February 25, 2010
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