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Not everybody thinks the latest twist is a major shock, however. The shift was signaled last week by investor Fred Wilson of Union Square Ventures, a Twitter board member, who presaged the Tweetie announcement when he pointed out that developers needed to start focusing on innovation–not just plugging obvious gaps in the company’s existing product.

“I think the time for filling holes in the Twitter service has come and gone. … What are the products and services that create something entirely new on top of Twitter?” he wrote in a blog post.

For some of those suddenly faced with competing more directly with Twitter, it is important that the company offers an olive branch at Chirp. TweetDeck’s Dodsworth suggests that independent software houses will need to focus on things that Twitter itself cannot–or will not–bring in-house.

“I think it unlikely that Twitter will be adding Facebook, LinkedIn, MySpace–or a few others’ streams we have coming up–to their interface any time soon, and that’s a pretty good differentiator,” he says.

And while plenty of talk at Chirp is likely to focus on the conflict between the company and third-party programmers, Twitter could easily smooth over fractured relationships with smart announcements–especially if those include financial incentives for developers.

Jan Schulz-Hofen runs a Twitter advertising network called Be A Magpie, which boasts 15 million users, making it the largest of its kind.

“The people at Twitter are very smart and won’t be reinventing the wheel,” he says. “We expect them to either come up with something that’s entirely new and groundbreaking, which will be good for the ecosystem as a whole, us included, or partner with existing players to help their business and take a share, which would also be good for us, I guess.”

Schulz-Hofen expects to see a number of new features aimed at those who use Twitter for business–including access to new data sources, tools for power users and other services that companies may be willing to pay for.

“As everyone else, we can only speculate,” he says. “But I would not be surprised to see more business features like coauthoring and analytics,” he says. “In-stream advertising? Maybe. I guess we will have to wait and see.”

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Credit: Iain Dodsworth

Tagged: Business, Web, Twitter

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