Twitter Wants to Make Money

August 26, 2009

How do you take a good, free service with a large and growing user-base and make money off of it? There are two obvious routes.

  1. Take away the “free” aspect and start charging users or go halfway and create paid premium accounts which have more privileges than normal accounts.
  2. Keep it free, but compromise the aesthetic with advertising.

Well Twitter, everyone’s favorite micro-blogging service, is looking to finally gain a revenue stream.

Biz Stone

Biz Stone, co-founder of the company, said in a May 2009 blog post that while Twitter is not philosophically opposed to the idea of advertising, “[…]the idea of taking money to run traditional banner ads on Twitter.com has always been low on our list of interesting ways to generate revenue.” Stone has repeatedly stated that he’d like to foster Twitter’s ability to bring businesses and consumers closer together, implying that he sees Twitter as a tool with potential to be more than just a venue for the chattering of the masses. Stone has said that “the service’s value should be judged, not by its traffic – which grew 131% in March to 9.3 million visitors – but as a tool to ‘facilitate connections between businesses and individuals.'” If Twitter succeeds in that goal, it may achieve lasting commercial value, and become more than just social media. So how can they achieve this? The people at Twitter have a few ideas:

  1. Premium Accounts, or more accurately, “commercial accounts.” Twitter is considering making paid accounts which would appeal specifically to businesses trying to reach consumers through Twitter. The accounts would offer the advantage of sophisticated analytics to assess how well a company is Twittering.
  2. APIs, once again being more  commonly referred to as “commercial APIs”. The idea is to create”business-oriented application programming interfaces (APIs), creating a ‘commercial layer’ over the social network.” Presumably these would serve as more obvious means for businesses to sell through Twitter to consumers, rather than just talking up their new products on the service. An example might be an online store API which sits right in Twitter. Twitter is also talking about coming out with an API which allows latitude and longitude to be tied to any tweet. You could then conceivably filter tweets by location, allowing you to find out who’s at that concert with you, or who’s tweeting from the earthquake in China. Not exactly as useful a service for commercial applications, but still a good example of how the effective functionality of Twitter could potentially increase in the near future.
  3. Certified Accounts, which presumably are tied in with premium accounts, are different as far as their specific purpose. A “certified account” would be an account to which Twitter gives its seal of verification, so that everyone knows they’re hearing from “the real Shaq” and not an imposter who’s looking to mislead a slew of basketball/Kazaam fans. Twitter has done this for a few celebrities already, and you can see how a “certificate of genuineness” would be appealing for brands trying to Twitter. Not only would it instill trust with consumers, it will probably also give certified users priority status when searching for related users or services. One drawback is that normal, public users might see it as a mark of a corporate account which is only trying to push their products, and immediately avoid such certified users. Still, I don’t think Shaq has to worry about losing his own unique brand of genuine Shaqness.

These are just a few ideas for how Twitter can start to make money. Regardless, Twitter has raised $55 million since the company started 2 years ago and made it past 44.5 million unique users in June, according to ComScore. In light of that information, Stone has asserted that Twitter has plenty of cash and is in no rush to develop a business model. As to whether or not you’ll ever find yourself paying for your personal Twitter account, Stone is quick to reassure users, “Twitter will still be free for everybody and we’ll still tell them to go crazy with it, but we’ve identified a selection of things that businesses say are helping to make them more profit.” So maybe all you free users can help Twitter make some money…by spending it on businesses that are using Twitter.

References

premium accounts

commercial accounts/APIs

Twitter staying ad-free

long/lat API

Stone’s advertising blogpost

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The Rise and Fall of Thinking Machines: How Mismanagement and Bad Business Brought Down a Company that was Ahead of its Time

August 20, 2009

For Gary Taubes’ original article, click here

A close-up look at a doomed-yet-brilliant start-up computer company that never quite grasped the basics of business.

Some day we will build a thinking machine. It will be a truly intelligent machine. One that can see and hear and speak. A machine that will be proud of us.

— From a Thinking Machines brochure

* * *

In 1990, seven years after its founding, Thinking Machines was the market leader in parallel supercomputers, with sales of about $65 million. Not only was the company profitable; it also, in the words of one IBM computer scientist, had cornered the market “on sex appeal in high-performance computing.” Several giants in the computer industry were seeking a merger or a partnership with the company. Wall Street was sniffing around for an initial public offering. Even Hollywood was interested. Steven Spielberg was so taken with Thinking Machines and its technology that he would soon cast the company’s gleaming black Connection Machine in the role of the supercomputer in the film Jurassic Park, even though the Michael Crichton novel to which the movie was otherwise faithful specified a Cray.

In August of last year Thinking Machines filed for Chapter 11. It had gone through three CEOs in two years and was losing money at a considerably faster rate than it had ever made it.

What caused this high-flying company to come crashing to earth? The standard explanation is that Thinking Machines was a great company victimized by the sudden cutbacks in science funding brought about by the end of the cold war.

The truth is very different. This is the story of how Thinking Machines got the jump on a hot new market — and then screwed up, big time.

* * *

Until W. Daniel Hillis came along, computers more or less had been designed along the lines of ENIAC. In that machine a single processor completes instructions one at a time, in sequence. “Sequential” computers are good at adding long strings of numbers and at other feats of arithmetic. But they’re seriously deficient at the kinds of pattern-recognition tasks that a two-week-old puppy can master effortlessly — identifying faces or figuring out where it is in a room. Puppies can do that because their brains — like those of all animals, including humans — are “massively parallel” computers. Instead of looking at information one jigsaw-puzzle piece at a time, a brain processes millions, even billions, of pieces of data at once, allowing images and other patterns to leap out.

While a graduate student at MIT’s Artificial Intelligence (AI) Lab, Hillis, whom everyone knows as Danny, had conceived of a computer architecture for his thesis that would mimic that massively parallel process in silicon. Hillis called the device a “connection machine”: it had 64,000 simple processors, all of them completing a single instruction at the same time. To get more speed, more processors would be added. Eventually, so the theory went, with enough processors (perhaps billions) and the right software, a massively parallel computer might start acting vaguely human. Whether it would take pride in its creators would remain to be seen.

Hillis is what good scientists call a very bright guy — creative, imaginative, but not quite a genius. He is also an inveterate tinkerer, whose work has always been more fascinating than practical. On the fifth floor of Boston’s Computer Museum, for instance, is a minimalist computer constructed of fishing line and 10,000 Tinkertoy parts. Hillis built it to play and win at tic-tac-toe, which it invariably does. His other work includes a robot finger that can differentiate between a washer and a screw but is flummoxed by a piece of gum; a propeller-driven jumpsuit that allows its wearer literally to walk on water; and a home robot constructed of paint cans, lightbulbs, and a rotisserie motor.

At the AI Lab, Hillis had become a disciple of legendary AI guru Marvin Minsky. The two were determined to build a connection machine as a tool with which to develop software programs for artificial intelligence. Because the cost would be prohibitive for a university laboratory, they decided to form a company. They went looking for help and found Sheryl Handler.

Handler had participated in the start-up of the Genetics Institute, a Harvard-based genetic-engineering firm. Her background was eclectic: she had studied interior design, held a master’s degree in landscape architecture from Harvard, and at the time was pursuing a doctorate in city planning at MIT. She was also running her own nonprofit consulting firm, specializing in third-world resource planning. She had a taste for classical music and a fine appreciation for style. She’d even been the subject of a Dewars Profile that ran with the quote “My feminine instinct to shelter and nurture contributes to my professional perspective.”

Handler also had a talent for cultivating friendships with brilliant and famous people. One of her Genetics Institute colleagues later called her a “professional schmoozer.” She quickly proved her usefulness by connecting the people who would build the Connection Machine with CBS founder William Paley. Hillis, Minsky, and Handler pitched the idea to Paley and CBS president Fred Stanton in a meeting to which Hillis wore his customary jeans and T-shirt. Still, he managed to impress the television moguls, who with others eventually agreed to kick in a total of $16 million to the venture.

In May 1983, despite the lack of a business plan, the company was founded and took up shop in a dilapidated mansion outside Boston that once was owned by Thomas Paine, the author of the Revolutionary War pamphlet Common Sense. Hillis and Handler called their new company Thinking Machines because, says Hillis, “we wanted a dream we weren’t going to outgrow.” As it turned out, there was never much danger of that.

Read the rest of this entry »


Bing vs. Google Smackdown! Will You Still Be Googling?

August 10, 2009

It’s been a long time since a new search engine has been introduced to the market which rivals the likes of Google. Enter Bing, Microsoft’s answer to the Google juggernaut and the replacement for their mediocre “Live” search. Bing has become the subject of much news, discussion, and conjecture about the future of the search engine landscape. Here I’ll take an unbiased look at Bing’s positives and negatives in direct comparison with Google, and come to some informal conclusions. The goal is to find which search engine is better, and whether or not Bing has a real chance of overtaking Google any time in the future.

So first of all, what’s the big deal about Bing? In the tech world, people are excited about Bing because it is supposedly the internet’s first “semantic search” engine. I discussed the idea of semantic search a little bit in my post on Web 3.0. The idea of semantic search is that it’s supposed to organize the internet algorithmically rather than heuristically, allowing computers to browse topics more efficiently, giving you more accurate search results. I’m not sure what technology is actually running the back-end of Bing, but whether or not it’s true semantic search, it’s not clear on the front-end and is therefore mostly irrelevant. The bottom line is, if you’re looking for a technological revolution in your search engine, Bing is not it. I would say the closest thing to a semantic search engine that is currently available is Wolfram|Alpha, the “computational knowledge engine” from the guys who created Mathematica. Nonetheless, while Wolfram Alpha is cool to play around with, it’s a huge project with mostly hand-coded results and at the moment is little more than an advanced internet encyclopedia. Still, it’s a step towards making the internet’s knowledge computable, which is an admirable goal.

So back to Bing. If it’s not a technological leap beyond Google, what makes it worth using? The most immediately obvious advantage of Bing is its visual appearance. Google is known for taking a very minimalist approach visually, whereas Bing is definitely more stylistically appealing. To illustrate this point, let’s look at a side-by-side search comparison.

First let’s pretend we’re booking a vacation. For our flight, I’ll search “flight to NY”.

Google Results:

google flight ny

From Google we see the results you’d probably expect: a list of different sites offering plenty of information about flights to NY, albeit the information is in all different places. Obviously it’s going to take me some digging to find the best deals.

Bing results:

bing flight to ny

Already it’s pretty clear that Bing wins in the aesthetics department. But what about functionality? Well we can see that the first link is already giving me some comparative  flight fares. If I click that link I get this page:

bing flight to ny farecast

This is where Microsoft begins to show its clout. Because Microsoft owns so many companies in so many different places, users get the advantages of those different services integrated into their search. This page comes from a Microsoft owned company called Farecast, and with this technology, I get to see compared prices for flights from different areas, whether the prices are currently rising or falling, and when the best times to fly are. This is all on one page in a visually pleasing format. Bing has similarly convenient services for other travel-related searches, and with a little clicking around, you can work out the best deal for your flights and hotels remarkably easily.

Let’s look at some more comparative results. Say I’m interested in seeing Pixar’s movie “Up”. The search term “Up” is extremely vague, so it should yield some interesting results.

Google results:

google UP

Once again, Google covers the basics very well. It uses its memory of my location to find showtimes near me. After that we have the movie’s official site, the imdb page, and then it starts to stray into some unrelated videos. Nonetheless I do pretty much have access to anything I might be looking for in relation to the movie Up. Now let’s try Bing.

Bing results:

bing UP

After viewing the Bing results, we have an interesting comparison on our hands. While Bing is more visually appealing just because of the basic layout of Bing, Google gives us more accurate and practical results. Both of them give location-based showtimes as the top link, but beyond that Bing gets a little off-topic. Ultimately I think even though Bing has an immediate edge given its aesthetic superiority, Google wins in a utilitarian sense.

For a final comparison we’ll take a look at the two search engines capabilities when it comes to viewing media. Most people are familiar with Google’s image and video options in search, but how do they stack up next to Bing’s? For this example I’m going to use the search term “guitar” in both Bing and Google, and then see what their image and video searches do with it.

Google image results:

google image guitar

Bing image results:

bing image guitar

I honestly did not expect an appreciable difference when it came to image results, but in fact there is. The difference is really in the details here. While Google just gives you a block of guitar images and related search options, Bing comes at you with a plethora of options with which you can truly refine your search. Bing allows you to sort the images by size, layout, color, style, and more. You can change the size of the images that appear in the grid. This was one of those moments where I went, “Why doesn’t Google do all this?” Then I realized that if you click on the tiny “more options” button in Google, it does. Though it doesn’t look as good, Google does give you the same functionality, if you have a good eye. It nonetheless worries me that as a frequent Google user, I had no idea these options existed until doing this research. That leads me to believe that most people searching through Google have no idea these options exist. Basically in this case Bing doesn’t really have more functionality than Google does but it’s used smart visual elements to make the functionality which is hidden in Google very visible to users. Now let’s do the same comparison, but with video.

Google video results:

google video guitar

Bing video results:

bing video guitar

For this comparison I left Google’s “more options” tab out for your viewing pleasure. You can see that with that tab available, the searches become pretty much identical. However my qualm about accessibility remains. If you don’t already know about the “more options” button, you’re not likely to find it, or to click it. Beyond that issue, Google does give more accurate results in my opinion. I’m guessing they use all the data collected from Youtube to find which videos people are more likely to be looking for. Still, consistent with the rest of my reseach, Bing is more aesthetically clean and pleasing.

Conclusions

It’s pretty easy to come to a few basic conclusions here. Google still seems to have better insides, with results generally being more intelligent and accurate across the board. Conversely, Bing has better design and is therefore more visually appealing in pretty much every considerable category. Should you use Bing over Google? It depends what you value in your search engine. Honestly, I probably won’t and I’m not sure I can tell you why. Google has instilled a certain trust in its user-base (i.e. almost everyone who uses the internet) which Bing has yet to achieve. So that pretty much answers the next question, will Bing overtake Google? I don’t think so, but it wouldn’t be wise to rule anything out. If there’s one company in the world which would have a chance at doing so, it’s Microsoft. Also, Microsoft says they plan on slowly rolling out improvements and new features for Bing in the future, similar to Google’s development strategy. So we’ll see what happens. For now I’m still Googling, and I don’t see Bing becoming a new verb anytime soon.

Not enough analysis for you?

http://searchengineland.com/microsofts-bing-vs-google-head-to-head-search-results-20006

http://news.cnet.com/8301-17939_109-10251432-2.html

http://www.nytimes.com/2009/07/09/technology/personaltech/09pogue.html?_r=2

http://searchengineland.com/meet-bing-microsofts-new-search-engine-20093

http://www.wired.com/epicenter/2009/05/microsofts-bing-hides-its-best-features/


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