Ryan Holmes in Fortune – Why Did Twitter Divorce LinkedIn?

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A column by HootSuite CEO Ryan Holmes was featured on the Fortune Magazine website last week.  Holmes weighs in on Twitter’s recent breakup with LinkedIn, which is no longer able to display tweets in its users’ activity streams.

You can check out the story – and what it means for the Twitterverse – here.

Reining in the Ecosystem

The blogosphere has been buzzing with possible theories for the rift this week.  Many commentators have pointed to the fact that LinkedIn wasn’t displaying Twitter’s new features, including threaded conversations and expanded tweets, an explanation echoed by Twitter’s own consumer product lead.

But money is also part of the issue.  Twitter’s revenue model is built around selling ads, which appear as promoted tweets, trends and accounts and in several other forms.  This model depends on drawing in as many users as possible and monetizing them through ad sales.

LinkedIn – and similar third-party consumer apps that rely on Twitter’s API – may have posed a challenge to this model by effectively funnelling consumers away from Twitter’s own site.  Of course, there are some very significant collateral benefits of this arrangement, which Twitter’s own founder Biz Stone has acknowledged.  Twitter’s wide-open API spawned the giant ecosystem of outside apps in its orbit – more than a million and counting – and enabled the network to amass a half-billion users in just six years.

But as Twitter has turned its attention to monetization in recent years, it has tightened the reins on outside developers and begun to restrict its API.  In this context, the LinkedIn decision makes perfect sense – part of a movement to channel consumers back to Twitter and its own branded apps.

Twitter as a Medium for Interaction

Fans of Twitter and LinkedIn have been understandably shaken by the sudden breakup.  Many have wondered if it had to happen and what can be done to prevent future splits.  Bottlenose CEO Nova Spivack offers a very attractive compromise solution.  Rather than dropping third-party developers, Twitter could simply inject its ads into their API streams.  If developers want, they can opt out of these ads by paying a small fee.  It’s a win-win: Twitter gets revenue; developers keep API access.

It’s not clear why this solution didn’t work in the case of LinkedIn.  But it’s possible to read between the lines of a blog post from last year by Twitter’s director of platform Ryan Sarver.  He emphasizes that third-party apps shouldn’t “mimic or reproduce the mainstream Twitter consumer experience.”  In other words, apps that just take tweets and redisplay them for consumers aren’t going to cut it.

On the other hand, Sarver notes that business utilities – that cement Twitter’s role in the business world and use the API in new and unexpected ways – represent a real growth area for developers.  He praises apps (including HootSuite) that service brands, enterprises and media companies, helping them to “tap into the zeitgeist about their brands on Twitter and manage relationships with their consumers using Twitter as a medium for interaction.”

For the full story, check out Holmes’ article on the Fortune website.