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Sunday, October 25, 2009

Raise Your Hand if You Didn't Do a Deal With Twitter This Week

Posted By on Sun, Oct 25, 2009 at 2:51 AM

Raise your hand if you didn't do a deal with Twitter at this week's Web 2.0 Summit at the Westin Hotel in downtown San Francisco.

With Microsoft Bing launching a Twitter search and Marissa Mayer from Google revealing that they too had a deal in the works, it was in partial jest that Federated Media CEO John Battelle asked mySpace CEO Owen Van Natta whether his company had also done a deal with the popular micro-blogging service.

As Battelle himself wrote in the Web 2.0 White paper, "The era of Web 2.0 [is] a race to acquire and control data assets."

Sources tell that Microsoft beat Google in the race to aggregate social data by a couple of hours. And picked up the big prize by pinning down both Facebook and Twitter for their search function. But the most interesting puzzle piece is that according to Facebook COO Cheryl Sandberg no money exchanged hands between Facebook and Microsoft perhaps due to a big investment from the latter, whereas both Microsoft and Google paid Twitter for the use of its API.

click to enlarge Twitter Founder Evan Williams yuks it up with Federated Media CEO John Battelle
  • Twitter Founder Evan Williams yuks it up with Federated Media CEO John Battelle

This excerpt from the White paper might explain the content smile on Twitter founder Evan Williams' face during his talk, in which he basically showed who was sitting in the Web 2.0 catbird seat, despite the recent slow-down in the company's growth.

From the Web 2.0 White paper:

If a company has control over a unique source of data that is required for applications to function, they will be able to extract monopoly rents from the use of that data. In particular, if a database is generated by user contribution, market leaders will see increasing returns as the size and value of their database grows more quickly than that of any new entrants.

Truth be told, Senator Ted Stevens was correct in his estimation of the Internet as a series of tubes, or as Unix geeks are more likely to analogize, pipes of data. Twitter (for the moment) has the biggest pipe in the business, turning it into a fire hose of information, and the "earliest source for many people to learn about what just happened."

Perhaps the smartest guy in the social networking room, Napster founder and Founder's Fund managing partner Sean Parker was more than correct in his estimation of the microblogging service's dominance.

He who controls the pipes ...

Follow us on Twitter at @alexiatsotsis and @sfweekly.

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Alexia Tsotsis


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