Williams, Dorsey, and another Twitter cofounder, Biz Stone, are betting that by shoring up the service’s infrastructure, they’ll be able to fend off the mounting ranks of competitors. These include Jaiku, Plazes, Kyte, Yappd, Pownce, and Facebook (which has a feature that lets users update their “status” in a way that resembles twittering). All of these services differ: Jaiku has more functions than Twitter–users can add pictures to their posts, for instance–but it’s a bit complicated to use, and it doesn’t yet have as many users as Twitter. Pownce, which is still in its beta-testing phase, allows invited users to share different types of files with different groups of people: users can create lists that allow them to send information to one person (as in an instant message), to a few of their contacts, or to all of them. And Facebook is “in a much stronger position” than Twitter, Williams says, because for social applications, the number of users is crucial.
“If you look at Pownce and Twitter and Facebook today, they’re all conceptually the same, but they’ll evolve in different ways,” Williams says. “We know there are lots of features and functionality that we want to add and will add, but we don’t want to make it more complicated, because we do think that much of the beauty is in simplicity.”
Staying static for too long on the Web is risky, however, especially for the first company with a new type of technology. In 2002, a social-networking site called Friendster quickly became successful, gaining droves of users who created profiles that linked to their friends’. Friendster’s social-networking preëminence didn’t last long: in 2003, MySpace entered the picture. Now MySpace, which is owned by Rupert Murdoch, has around 100 million registered users, and it’s growing. Friendster still operates, but at a smaller scale than MySpace. (See “Friend Spam,” by Friendster founder Jonathan Abrams.)
Williams says that he thinks about Friendster’s fate, especially when Twitter’s service falters. “We’re doing okay now, but when we were doing really poorly, the Friendster analogy came up,” he says. This is why it’s crucial to focus on improving reliability and making the interface even more foolproof, he adds. “I think if we can make it perform and make it obvious how to use it and just get it in front of people, we’ll do well.”
Williams believes that building a healthy infrastructure is also the key to eventually making a profit, so that’s what he hopes to do with the money from Union Square Ventures. Fred Wilson, a Union Square managing partner, says, “I think with a lot of these kinds of services, the big looming question is ‘How are we going to make money?’ In the case of Twitter, we felt if they could build a communication system that was easy to use and was used in lots of different ways by lots of different services, then they could become a piece of the infrastructure of the Internet.” At that point, Twitter would possess enough “messaging volume” to get paid by someone: “probably by other people who want to participate in that volume–maybe wireless carriers,” Wilson speculates.
“Our advice was to not focus on generating revenue on day one,” he adds, “but focus on getting as many people and as many services as you can to use the underlying Twitter infrastructure to build messaging services.”
Crucial to this plan is ensuring that Twitter’s technology–that is, the structure of the system’s underlying code–can support new users as they join the service. Technologists say that a network “scales” when it can take on an increasing number of customers. A good portion of the company’s recent funding, Williams and Wilson say, will go toward making Twitter “scalable.” If that doesn’t happen, opportunities for profit may go unrealized.