A lot of banter and rumination going on at the moment pondering Twitter’s (rumored) $100M fund raise at a $1B valuation.
Chris Dixon, in particular, has written a thoughtful post on what the deal says about the state of Venture Capital.
I won’t get into that one, preferring to focus instead on what Twitter could possibly need $100M of additional funding for.
For Twitter (and Twitter's investors), this financing makes a lot of sense if one assumes that they roll up the choicest portions of the third-party twitter ecosystem into their core (through M&A), refine their API approach to this newly aggregated/federated platform and then cultivate a deeper, richer ecosystem around same.
Then, when the tree needs a good "pruning" again, they can start the M&A process anew.
Simply put, the sheer openness of Twitter’s API and ecosystem approach has led to the “blooming of a thousand flowers,” as hundreds of application developers find the goodness in piggybacking off of Twitter’s real-time messaging infrastructure, brand equity, user base and single sign-on support.
Ranging from rich client applications (TweetDeck) to URL shorteners/analytics (Bit.ly) and composite services (StockTwits, Twiddeo), the flowers are yielding some really interesting hybrids.
The opportunity for Twitter is to pick from the best, brightest and most synchronous, and role them into their platform to:
A) Make a better platform
B) Enrich user engagement
C) Fortify their monetization/business picture
After all, even the best gardens must be pruned from time to time.
(Side note: TechCrunch has a good post, ‘The Future of Twitter Visualized,’ that incorporates a couple of really good “connect the dots” graphics from Steve Rubel and Brian Solis.)
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