Ties between Twitter, app makers hit rough patch

The relationship between Twitter and the outside developers that build its apps is a little like the one between sharks and the small fish that latch onto their backs—beneficial for both, until it isn’t.

Lately, it has hit rough waters. The Federal Trade Commission is investigating Twitter’s relationship with the developers, and although neither Twitter nor the agency would comment, two people briefed on the inquiry said it questioned whether Twitter had been anti-competitive when it bought or regulated some apps.

At the same time, apps built by third-party developers have become a thriving corner of the tech industry. In the last six months, investors poured $500 million into developers of Twitter apps, while companies, including Wal-Mart and Salesforce.com, collectively paid $1 billion to buy such start-ups. According to Twitter, 750,000 developers have built one million apps, up from 135,000 developers and 150,000 apps a year ago.

However, the boom in apps has fuelled longstanding tensions between Twitter and the developers over whether they are partners or competitors.

When Twitter was introduced, the service was bare-bones. So the company encouraged developers to build apps for things like posting photos and using Twitter on smartphones.

The apps used Twitter’s technology, often free, and Twitter became successful early on largely because the apps made the service more helpful and easier to use. But Twitter can transform overnight from partner to competitor by building its own apps to do whatever the developers’ apps do, or by simply acquiring a developer’s app, which it has done several times.

To try to mend its relationship with developers and encourage them to keep building apps that improve Twitter, the company is inviting them to town hall-like sessions, and last Monday, it unveiled a developer website with a blog and discussion forums. Twitter’s chief executive, Dick Costolo, personally called some app developers to reassure them Twitter does not intend to tread on their ground.

The argument has sometimes been a tough sell. Just last month, Twitter acquired TweetDeck, a desktop application for active users, and added tools to automatically shorten links and post photos. That means Twitter now competes with other apps that do similar things, like Seesmic, Bitly and Twitpic.

Twitter has sparred with one app company in particular, UberMedia. That company, which has received a request for information from the FTC, makes several Twitter apps that were shut down earlier this year because Twitter said they had security problems. It also tried to buy TweetDeck before Twitter snapped it up. UberMedia declined to comment for this article.

“There’s some uncertainty within Twitter on whether developers are a help or just parasites,” said Adam Green, who advises Twitter developers and builds political Twitter apps.

Joe Fernandez, chief executive of Klout, a Twitter app for marketing, took a different view. “I believe they honestly care about developers building successful businesses and they want to help us,” he said. “Sometimes there are missteps, but I do believe their intentions are good.”

©2011 The New York
Times News Service