Talk about swings and roundabouts. In this case, Silicon Roundabouts. For Tweetdeck holds a special place in the growing galaxy of London tech startups and the news today that it is still ‘in play‘ as an acquisition target is fascinating.
Last night the WSJ reported that Twitter is offering around $50 million for Tweetdeck. This is after UberMedia had supposedly acquired Tweetdeck for $25-$30 million. UberMedia has $21 million in funding to Twitter’s $360 million. TweetDeck has raised a little over $5 million in funding.
Back in February we reported – pretty confidently – that UberMedia had acquired Tweetdeck for $30m, although no party released any official statement at the time. If true then this would have given Bill Gross’ company, after buying EchoFon, another popular Twitter client, 20% of the userbase of Twitter. Tweetdeck reportedly has 11% of active Twitter users.
But oh what users they are.
Indeed, perhaps that was the reason why there were early signs that this was not a cut and dried deal. One was that the founder, Iain Dodsworth – who I’ve been tracking since I interviewed him for a podcast way back in 2008 – remained utterly tight-lipped about the whole thing.
Another was a suggestion on the rumour-mill that Tweetdeck’s backers, among them PRO Founders and Index Ventures, had done a switcher-rooney style deal to take on shares in UberMedia in exchange for UberMedia bringing Tweetdeck in-house – no doubt for a mix of cash and shares.
After-all, this makes sense. In an advertising market where aggregators tend to hold all the cards (see AOL’s blog acquisition strategy for that one) UberMedia was on its way to controlling a large proportion of the Twitter audience, and thus a valuable ad platform.
Except there was just one problem: Twitter itself.
Despite benefitting from the proliferation of client apps, Twitter has realised in recent times that client apps can exert a lot of market power.
It’s a long time since 2006, when I told Ev Williams in a Paris bar at Le Web that the reason Twitter was working better than Jaiku (long since acquired by Google) was that it allowed 3rd party apps to innovate. On mobile you could only use Jaiku on a Symbian S60 phone or mobile web, and it had no API for third party developers. Twitter had lost that battle but went on to win the war by releasing a simple API for developers.
So now we have a scenario where it looks like Twitter itself is trying to out-bid UberMedia in order re-assert its control over the consumption end of its own firehose. How times have changed.
And what of a future where Twitter controls Tweetdeck?
Actually I see two alternative scenarios. Either they kill the product and bring out their own version (please God no). Or – and this would be much smarter, and to my mind more likely – they do what Tweetdeck and Dodsworth always intended Tweetdeck to do, which is go after the professional market. For this is the natural constituency of Tweetdeck.
To do so would mean Twitter would have a client app for the mass market (Tweetie) and one for the professionals (Tweetdeck).
Just look across the laptops open at any press conference and aside from realising they are 99% Macs, you’ll also notice every journalist using Tweetdeck.
Look across the laptops open at an Social Media confernece: Tweetdeck again.
Even ex-PM Tony Blair is using it.
It’s quite simply the best professional tool out there for dealing with Twitter, with multiple accounts, with pre-set searches, you name it. Tweetdeck’s share of Twitter’s audience is not just any old 11% – it’s the TOP 11% of users.
That is a hugely valuable audience and user-base and Tweetdeck, UberMedia and Twitter know it.
I therefore humbly disagree with the view that Twitter would shut down Tweetdeck. If anything it would simply close Deck.ly, it’s long-form microblogging platform – assuming it could be bothered and even then it might well keep that as an incursion into Tumblr’s space.
Indeed, has everyone forgotten how Seesmic effectively ceded the high-end user base to Tweetdeck, realising that if if could not win the high-end war it would have to pivot into the enterprise and cosy-up to Salesforce?
But whatever happens, it’s highly likely that Twitter has realised that it must wrestle control of Tweetdeck away from UberMedia. The alternative – just cutting off Tweetdeck’s access to Twitter – would be crazy.
Twitter has already shut down and then reinstated three UberMedia apps (Twidroyd, UberCurrent and UberSocial) for violating TOS policies – this was a train-wreck of a move.
And in fact those moves are more damaging to Twitter than simply bringing its users back into the Twitter fold. Especially given Tweetdeck’s valuable user base.
That means a bidding war is effectively on, and one which Tweetdeck’s investors, and Dodsworth, are no doubt quite content to see.
Finally, here’s the killer punch: If Twitter is valued at $8 billion then the top 11% of users would almost certainly be worth more that $50m. While that percentage of $8bn would be too high, the reach, brand and B2B positioning of Tweedeck put it closer to a $100m valuation.
Perhaps that’s why Dodsworth was so relaxed on Sunday?