The Information Networker: Twitter’s Golden Egg

Twitter is an example of a new breed of company; organized on a new kind of business model – one that’s deliberately designed to tap the power of people outside its organization.

A number of organizations take advantage of “User Generated Content,” but only a few have built the kind of momentum we see with Twitter. It has built a “social network application” that enables its most active customers to create and connect information, and in so doing generate a “real time information network” used by over a hundred million people around the world to “discover what’s happening now.”

The commitment of its core users is intense, and a key element of Twitter’s strategy for competing with Facebook. This group of users is the goose that laid Twitter’s golden egg – it’s real time information network. It’s also why Twitter isn’t going away any time soon.

Committing to Tweet

Think about it. Twitter has millions and millions of vocal writer-types tweeting over 90 million tweets a day! The serious ones, with the biggest soap boxes, have invested thousands of hours building their tweets and followings on Twitter. Spend that kind of time investing in anything – and it’s personal. You don’t walk away from investments like that without serious heartache and heartburn.

We’re also talking about a group of people with the collective power to shape public perception. Twitter’s superstars – its “Twitterati” – sow many of the ideas that grow in mainstream media today. What they say about things can bend reality until it becomes the new reality; and that’s no less true when what they’re talking about is something they care deeply about – like Twitter.

That kind of advocacy can be a powerful asset for Twitter, but there’s an even bigger one that’s even more deeply tied to the commitment Twitter’s core users have to the service…

An Information Network Powered by (Some) People

Twitter has built a powerful social network application for transforming the collective actions of its heaviest users into a valuable “real time information network.” Wow, that’s a mouthful, but stick with me because this is the essence of Twitter’s strategy for competing with Facebook – and it’s worth understanding if you’re investing significant time and energy on Twitter.

The key thing to understand about Twitter is that its user base is made up of two distinct segments; let’s call them “information consumers” and “information networkers.”

As I mentioned in my last post, two-thirds of Twitter users fall into the “information consumer” category. For this majority of users, Twitter is not really a social network; it’s a “real time information network” that, as we’ll see below, just happens to be “powered by people.” For this group, the Twitter experience is pretty much just reading tweets – a kind of glorified RSS reader, if you like.

Information networkers” are the remaining one third of Twitter users, and they’re what makes information actually move on Twitter’s network. Their experience of Twitter is part reading tweets, part posting tweets, and part retweeting other people’s tweets. When Twitter says that it’s a “real time information network powered by people,” this is the group of people they’re talking about.

Understanding the “Information Networker”

I’m using the term “Information networker” to describe a group of people whose work centers on creating and connecting information. In the past, we might have separated this role into writers and publishers, but today the lines between information creation and distribution have blurred. When we write for the web, we link to others to help us tell our story and, in doing that, we connect information and people.

Information networkers play a critical role in how information is distributed today. It’s a shift that started with websites, accelerated with blogs, and has reached a 140-character fevered pitch on Twitter. What information networkers link to matters. Google uses their links to a particular website or blog as the “collective intelligence of the web” and a sign that whatever is in those pages is important. With the growth of blogs, the significance attached to these links has expanded beyond the content to now include its writer as well. The more links that point to a particular writer, the more important, or influential, he or she is. This tiering is what creates the hierarchy of the blogosphere.

Information networkers play this same role on Twitter, only the way they connect information on Twitter is primarily through tweeting links and retweeting tweets. On Twitter, it’s the retweet that determines the relative importance of a particular piece of information on the network. The retweet is also much of what makes real time information actually flow in Twitter’s network.

Twitter as Blogosphere 2.0

Twitter is a distilled version of the blogosphere – on steroids. The information is denser and moves at much higher velocity on Twitter, but many of the social conventions around linking and sharing are strikingly similar. Twitter is so similar to the blogosphere – and so good at helping information networkers do their job – it’s almost as if it were specifically designed for that purpose.

In fact, it is. Toward the end of my post last week, I called Twitter a “social network application.” The question is, what does this application actually do?

Twitter is a social network application used by information networkers to distribute ideas and build their influence online.  In using Twitter for this purpose, information networkers also happen to build a very valuable real time information network that’s used by a much larger pool of people. Twitter has built upon the conventions of the blogosphere to create a hyper-efficient application for information networkers to create and connect information. In short, it’s a social network application built to harness “User Generated Content” in building a next generation news and real time information network.

Twitter has been particularly adept at designing the service to give information networkers what they want most – and that’s more influence. Influence is the carrot that Twitter uses to fuel the flow of information on its information network. The company has also been quite ingenious in the way it’s exposed its API’s to enable third parties to enhance influence tracking with a range of tools and different approaches to measurement.

A Symbiotic Relationship

But that’s not the most ingenious thing about Twitter. No, the master stroke, is the symbiotic relationship that Twitter has built between its two distinct bases – between its “information consumers” and its “information networkers.”

Twitter’s ability to generate cash over the long-term depends ultimately on its ability to get ads in front of lots of eyeballs. News and real-time information is one way of doing that, and that is exactly what Twitter is betting on. That’s why it’s senior management is bending over backwards to position the service as an information network. If you assume for the moment that the pool of information networkers is relatively fixed, then information consumers are Twitter’s key to adding more eyeballs – and advertising revenues. The more information consumers Twitter has, the more attractive it is as a place for information networkers to work their magic. So that’s a win-win.

My prediction is that over the next few years, we will see Twitter invest in lots of new ways to surface its real time information network to more information consumers than it reaches today. My guess is that much of this will involve partnerships. Doing that in ways that ensure a portion of ad revenues flow back to Twitter will be key to the company’s sustainability.

Golden EggFor this strategy to succeed though, Twitter also needs to ensure it doesn’t kill the goose that lays the golden egg. Without its information networkers, the information network runs dry. No news means no eyeballs and that will eventually mean no revenues. So, at the same time we can expect to see Twitter investing in ways to grow its base of information consumers, we should also expect the company to continue to invest aggressively in ensuring that Twitter remains the best damn social network application for helping information networkers to do their thing.

But What About Facebook?

In adopting this strategy, Twitter is deliberately side-stepping a direct fight with Facebook for the “social network utility” platform I talked about in my last post. Twitter is betting on the dedication of its information networkers as a way to ride the market opportunity in user-generated news and real-time information. As I said at the beginning of this post, big-time Twitter users have made huge investments in riding on Twitter’s success, so it is a strategy that has a good chance of succeeding.

There are still some potential risks in this strategy, however.

While most serious information networkers do their real information networking on Twitter, they often re-post on Facebook for added measure if it’s something they really care about distributing. Twitter’s Facebook app addresses this problem in some ways since it keeps users posting from Twitter and includes a little link back to Twitter. But somehow I don’t see Facebook cutting Twitter in on any of the ad revenues that accrue from people watching tweets on Facebook. So that’s an issue.

On a more basic level, Facebook’s larger base means that a lot more people share information with each other on Facebook than on Twitter. Remember the power curve of information distribution I talked about in the last post? Well, right now, posting on Facebook primarily serves the “Long Tail of that curve – the many, many people who either don’t share that much information or whose stuff isn’t re-shared by many others. Facebook is building a general utility for social networking; it’s not focused on serving the serious information networkers. But even still, some of the most serious competitive threats emerge over time from disruptions that start at the low end of the market. So that’s an issue too.

And what about the threat of Twitter’s biggest tweeters jumping ship? Its most vulnerable big Tweeters are its movie stars and other celebraties whose fame makes it easy to build online fan bases wherever they might go. These folks are a big part of Twitter’s top follower base today, and if it came to a choice between where to focus social media resources, I predict Facebook pages would eventually win out over Twitter. Why? Because Facebook’s role as the social network utility will continue to draw more people over time, and that’s where celebraties will migrate if they have to choose. That’s probably a false choice though, since many celebraties have behind-the-scenes help in maintaining their online social presences. As long as Twitter’s information networker strategy succeeds, it will have enough influential people to make it pay for celebraties to continue to play on Twitter. So that’s probably not as much of an issue.

Caring for the Goose

The lynchpin for Twitter’s continued success is its ability to remain attractive to the Twitterati and the millions of other information networkers. These people are not necessarily the ones with the most followers on Twitter. In an information network like Twitter, it’s the people and organizations whose tweets routinely spread the furthest in the network who matter most. The true measure of a Twitterati is not follower count, but influence – and this gets us back to the power of the retweet.

The true “Twitterati” are not Justin Bieber or Lady Gaga. They’re people like Pete Cashmore, Chris PirilloChris Brogan and Tim O’Reilly. They’re also news organizations like The Guardian, Tech Crunch, and NPR. You can see hints of this in the research I cited (PDF) last week in the “Ranking Twitter Users” section. These people (and organizations) are massively invested in Twitter as an information networking application, and when they tweet, it tends to cascade through the network. The day you see them move off of Twitter is the day you need to start worrying about the future of Twitter.

Sorry John Mayer. We’ll miss you, but you’re not the goose that laid this golden egg …

Conclusion

Information networkers are the key to Twitter’s future. In their quest to build influence, they tweet like crazy, and what they tweet is interesting enough to make it cascade through the network. With each tweet and retweet, these information networkers build the value of Twitter’s real time information network.

Twitter is one of the clearest examples I’ve seen of an organization that deeply engages its base in building the value of its service. In this sense, I believe Twitter is a taste of the future of well-run firms – firms that know how to harness the passion of people outside their organizational boundaries to serve a mission and create market value. Sure, Twitter’s still working on that last part, but it has a damn good goose. The golden eggs will come.

The kind of engagement Twitter has with information networkers is an extremely powerful lever. The company is using creative, win-win strategies with this core customer base, and in doing so they are building the kind of investment – and commitment – you simply can’t buy with money.

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