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Twitter’s Golden Egg: Location

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Editor’s note: Semil Shah is an entrepreneur interested in digital media, consumer Internet, and social networks. He is based in Palo Alto and you can follow him on twitter @semilshah

When “New Twitter” launched in 2010, the rollout was accompanied by a playful video demo of the new platform, where users could view threaded conversations and see multimedia within the web page itself. New Twitter presented an interface that allowed users to stay on the native site (www.twitter.com) rather than link out and open new tabs. Additionally, Twitter released slick new apps for the iPhone and iPad, which also provided ways to keep users on their native platforms. Part of the incentive they created, of course, is that constantly linking out and away from the site for information creates friction and an opportunity for others to draft behind Twitter’s massive scale to create different, more focused experiences.

In reality, however, Twitter’s core strength—limiting posts to 140 characters—has created opportunities for other websites and apps to siphon off and capture users around activity that originated on Twitter. These new sites and services leverage Twitter’s distribution pipes, free of charge, offering little or nothing in return.

From my observation, the most common tweets tend to share information pertaining to one or more of the following:

  • Sharing Pictures / Multimedia
  • Introductions / Endorsements
  • Linking Content
  • Posing Questions
  • Commentary on Entertainment & Sports
  • Current Events (Technology, Politics, Finance)
  • Sharing Location
  • Sharing Emotions / Moods

In 2010, these common tweeting behaviors created opportunities for new entrepreneurs to leverage. In pictures, Instagram became a hit with its range of filters and sharing features while users could also choose to have their in-app photos hosted by external blogging sites such as Posterous. For introductions, Hashable provided a service whereby users could easily exchange contact information and keep track of what introductions they were a part of. The act of posing questions in tweets has been captured by Quora. Twitter users’ fascination with entertainment and sports has prompted Twitter hiring its own employee (@omid) in the Los Angeles area (and dedicating separate servers for Justin Bieber). On the political side, Twitter has made key hires from the DC beltway, and its possible a startup like Votizen could leverage the platform to help organize political interests online. Sports fans have sites like Fanvibe. For current events and information, Twitter helps drive traffic to a host of tech blogs, news blogs, and financial blogs, which themselves can be real lifestyle businesses. I’m sure there’s a business opportunity somewhere to collect and interact with Twitter users based on their expression of mood and emotion, though there could be some health and privacy concerns there.

But, what about location? Is there a real, sustainable, long-term business model in location for Twitter?

I started thinking about this after following two independent Quora threads: (1) “What are some creative ways to monetize Twitter?” (link) and (2) “What do users want in a location-based app?” (link). On the one hand, most everyone benefits greatly from Twitter, myself included. I love the product. I want it to be successful and last forever. I would even pay to use it. However, many folks wonder how Twitter will turn into a real business, despite its recent $3.7 billion valuation and global footprint. On the other hand, users are inundated with options for sharing their location, either through Facebook Places, Foursquare, or by using Gowalla which lets them check-in and broadcast across the board. Users sense “location” is going to be big, but they don’t know how, and some are getting tired with all the different ways to do it.

The lack of clarity around which location-based services will win, combined with Twitter’s search for a long-term business model, provides Twitter with a fascinating opportunity to temporarily concede other arenas (such as pictures) and focus on location to test, refine, and settle on one clear revenue plan. Today in location-based apps, users prefer deals and coupons over game mechanics and badges. Foursquare is great, but it’s no Groupon.

In this sense, Twitter could become a robust platform to deliver local deals in real time. Each time a user enters a tweet into the system, either via Web, native app, text, or third-party client, Twitter will know the location, either by IP address or through a mobile phone’s GPS chip. There are two ways Twitter can turn this opportunity into driving users to specific merchants and close a transaction:

  1. Based on the user’s location from a tweet, Twitter can push opt-in text/email alerts and Tweets to the user from local merchants that can be used immediately or saved for redemption.
  2. When a user enters a store, the user can tweet something simple, such as “Stanford Mall” and automatically receive replies or text/email alerts from nearby merchants. The beauty of this option is that those without smartphones or complicated data plans don’t have to choose between LBS apps, but can simply send tweets via text message from any phone.

As a believer in Twitter and Location and a heavy user of both, I would selfishly like to see this happen. However, I don’t mean to imply that it will be entirely straight-forward or that this is the only revenue path for Twitter. It is just one idea, but potentially a big one and timely given the current acquisition climate and the soaring popularity of local and flash deal sites.

Photo credit: Flickr/David Hobby (with permission).

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