By: Gigaom
July 03, 2012 at 12:39 PM EDT
Twitter faces the same dilemma as the New York Times
Beneath the furor over Twitter's clampdown on its API is the same dilemma that many traditional media companies like the New York Times are also confronting -- namely, how much should you be an open platform, and how much should you be a destination?

There’s been a lot written recently about Twitter and the choices it seems to be making about the future of the network, although the exact nature of those choices remains shrouded in mystery. Some say Twitter made the wrong choice when it decided to focus on advertising as a business model, rather than expanding its status as an open platform for others to build on, while others argue that doing this was the only possible move the company could make if it wanted to build a business. In many ways, this dilemma is the same one that confronts many media companies (which isn’t surprising, since we have argued that Twitter effectively is one) — namely, how much should you be a platform, and how much should you be a destination?

As entrepeneur Dalton Caldwell has noted, at some point during the past two years Twitter made a deliberate decision to de-emphasize its nature as a platform with a wide-open API that allowed developers to add functionality to the service. It’s fascinating to look now at a post that now-CEO Dick Costolo wrote on the Twitter blog in 2010, in which he describes what appears to be a very different future from the one Twitter has pursued — one in which a new feature called “Annotations” would allow the network to function as a real-time information utility, which other services could build into their offerings:

We will continue to move as quickly as we can to deliver the Annotations capability to the market so that developers everywhere can create innovative new business solutions on the growing Twitter platform.

Twitter chose advertising over being a platform

Although Twitter has implemented some added functions that allow it to offer things like the new “expanded tweets” feature it is currently rolling out, Annotations as it was originally described never really came to be. Instead, the company chose to focus all of its efforts on becoming an advertising platform, with features such as “Promoted Tweets” and “Promoted Trends,” and partnerships with large brands and media players like Coca-Cola and MTV. And the more it has focused on advertising, the more it has confronted the kinds of challenges that media companies of all kinds are confronting.

It’s not just advertising as a business model that is the central challenge for Twitter, however, as it is for other traditional media players like the New York Times. It’s the inherent tension between the two potential futures that Caldwell mentions in his post: the one in which Twitter is an open platform with a robust API that allows other players of all kinds to build on top of the network — turning it into a sort of real-time news and information distribution utility or plumbing provider — and the one where the company becomes a media player in its own right, controlling the access to that information as tightly as possible, and monetizing the attention around that information via advertising.

The New York Times has experimented with open APIs, which give outside developers access to its data for use in third-party services or features, and so have a number of other newspapers and media companies such as USA Today and National Public Radio. But the traditional media player that has taken this idea the furthest is The Guardian newspaper in Britain (see disclosure below) — which launched an “open platform” project in 2010, offering all of its data to outside developers through an API. Doing this has been a core part of Editor-in-Chief Alan Rusbridger’s concept of “open journalism.”

Can a media company survive as an open platform?

In a nutshell, the Guardian‘s open platform project offers developers and third-party services full access to the newspaper’s stories and other data, and they can pay for that access in one of two ways: they can either pay a licensing fee for the data, or they can allow the Guardian to insert advertising into the stream of content that they get. This is very similar to the vision of Twitter’s future that entrepreneur Nova Spivack detailed after Twitter gave its warning, one which would involve the service either charging users and services directly for access to the “firehose” of data from the network, or monetizing it by inserting ads into the feed.

Twitter may not create content itself, but the recent moves it has made — whether it’s the launch of “curation” services based on its acquisition of Summify, or the creation of new editorial services built around experiences like the recent NASCAR race, or the focus on new features like “expanded tweets” — are driven by the same impulse as anything the New York Times or any other media company does: that is, a desire to commandeer (and/or seduce) the attention of users and direct them to the company’s platform, whether that’s a printed newspaper or a website like Twitter.com. And the fundamental purpose of doing this is to monetize that attention by selling it to advertisers.

Is it possible for a media entity to simultaneously be an open platform and a destination? The Guardian has had some success with its open platform, but how much isn’t really known, and it certainly isn’t enough to stop the massive financial losses the paper is undergoing — which isn’t going to fill a company like Twitter with confidence, especially when it is trying to justify an almost $10-billion valuation. And so the network’s future looks more and more like that of a traditional media entity, chasing the same eyeballs that everyone from Facebook to Google are also pursuing.

Disclosure: Guardian News and Media Ltd., the parent company of the Guardian newspaper, is an investor in the parent company of this blog, Giga Omni Media.

Post and thumbnail images courtesy of Flickr users Fabio Venni and jphilipg

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