Peter Kafka

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Twitter Guys: We’ll Still Be Running This Company in Five Years

Meet the Internet’s It Boys: Twitter co-founders Evan Williams and Biz Stone. A year ago their “micromessaging” platform was unknown outside of a small circle of digerati. Now the service has broken through to the mainstream, or at least to the mainstream media (thanks, Oprah!). But while Twitter has no problem generating attention, it’s still unclear how the company will actually generate revenue. Or maybe it doesn’t need to do that: Last year Facebook offered to buy Twitter for $500 million in cash and stock, and the service could presumably garner a much higher price today–perhaps from Microsoft (MSFT) or Google (GOOG). Or at least that’s what its investors may be hoping for.

Session Highlights

Live Blog

  • After Kara Swisher assists Jill Sobule with a song penned for (and about) Rupert Murdoch, Walt Mossberg joins her on the stage and they thank the audience. “We double-mean it this year,” says Walt.
  • Walt and Kara explain their “Web 3.0″ thesis, which you can find explained in detail here. They also plug the new All Things Digital iphone app (which is excellent!) and run through a series of less helpful iPhone apps–less helpful because they don’t exist. The Carol Bartz app gets some applause.
  • Walt: It’s all about apps. Apple (AAPL) dominates that business but we will show some other great stuff at this conference. Kara: Normally we start out with big-company CEOs, but instead, we’re going to bring out the company that everyone is talking about. Here are Biz Stone and Evan Williams of Twitter.
  • Kara shows off a video that depicts her mother’s low opinion of Twitter. Well worth watching.
  • Walt: We also have real data about people’s opinions re: digital media, commissioned by an actual polling firm–Penn, Schoen & Berland. For instance, only 51 percent of Twitter users are on the service once a month. What’s the deal with that?

Twitter is still in its infancy

Why People Tweet

Monetizing Twitter

  • Evan: That’s fair. We know it’s in its infancy. There are lots of ways to fix the adoption curve that we know how to do.
  • Evan explains the history of Twitter. He sold Blogger to Google, hired Biz, started Odeo, a podcasting company. Walt: “Which got crushed by Apple.”
  • Biz: I followed Evan to Odeo, and we started working with Jack Dorsey, who had this idea that just involved IM-like status updates that could update via mobile. To Ev’s credit, as CEO of Odeo, he sent us off to work on that.
  • Evan: A few months later, at Odeo, we just didn’t see a bright future for that. Generally, if I’m not personally invested in the product, and don’t use it myself…
  • Biz: I started playing with Twitter and I started laughing at Evan’s posts and thought that was a good sign.

Twitter founders at D7

  • Evan: It was so simple. “It didn’t look like a real thing. The simplicity turned off some of our engineers. It wasn’t obvious at all.
  • Walt: How many users do you have? Biz and Ev won’t comment.
  • Evan: We wound down Odeo, returned the money to investors and made them whole and went off to focus on Twitter.
  • Walt points out that most users don’t use the Twitter.com interface. Biz: We have at least twice as much usage via the open API and other clients as we do via Twitter.com.
  • Walt: Is that good thing? Evan: Yes. Very much so. We’ve never built an iPhone app, but there are at least a dozen of them. You can’t win by trying to corral everything in. We have all these people adding value. We can’t build all the stuff people want with 45 people.

Twitter founders at D7

  • Biz: Openness, open platforms are a big deal. We’re seeing lots of this. And people communicating on these open platforms is a big deal. It’s not just with communication. It’s with open-source software, transparency at companies, etc. People are building a ton of value this way.
  • Evan: This openness helped create Summize, the search engine we bought a year ago. That couldn’t have happened if we weren’t open with our data. Turns out there’s a huge opportunity with search, and we hadn’t foreseen that.
  • Walt: Will future projects and developments happen on Web pages or on clients/apps?
  • Evan: We’re interface-agnostic. We’re more concerned about what the data is and that it should flow to all clients. I don’t think we’ll build a desktop app, but we will tweak the Web site a bit.
  • Kara: Everyone’s talking about real-time search. But what kind of real business opportunity is available there?
  • Evan: Real-time search means different things on different platforms. On Google, it’s Web search. On Twitter, it’s Twitter search. It’s different from what other people are talking about when they’re talking about real-time search. One of Twitter’s properties is that it’s low-latency, and speed is important in information dissemination.
  • Kara: So what’s the value in that? What’s the advertising premise for that?
  • Biz: When I think about search, I think about a box and a button. When I think about Twitter, I zoom out a bit, and I think of discovery.

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  • Walt: Is there a way to sell that?
  • Biz: Pfft….There’s a way to make introductions to people, to tell them that things and people are available on Twitter, and there’s certainly money in that.
  • Walt cites another piece of polling data: 30 percent say they’d be willing to see banner advertising on Twitter. Does that work for you guys?
  • Evan: I think it’s probably the least interesting thing we can do.
  • Kara: So you’re least interested in doing it?
  • Evan: Yeah.
  • Walt: 24 percent say they’d pay for power accounts. Do you think that’s a good idea?
  • Evan: Yes, I think it’s a good idea. We’ve talked about it for a long time. Here’s how it might work: Lots of commercial users are on Twitter already.┬áThat’s not odd, and it’s happening successfully already. But we could give those users tools to make it better. For instance, here’s how P&G (PG) might sell Tide…Wait that’s a bad idea. How about The Wall Street Journal? No, they’re a media company; that won’t work either. How about Dunkin’ Donuts? People like Dunkin’ Donuts. They have an affinity for that, and they’re already following Dunkin’ Donuts. So one thing we can do is tell new users that the Dunkin’ Donuts account on Twitter is actually Dunkin’ Donuts. To verify that.
  • Walt: OK, what else could you do with that?

Walt and Kara interview the Twitter founders at D7

  • Evan: There’s a million ways, if you’re doing this in real time, to make this useful, and it won’t be annoying to people because if they don’t want that information, they won’t subscribe to a particular account.
  • Biz on hype: We realize that this constant stream of attention will eventually go away. We have to keep concentrating on the company. “We’re one percent into Twitter.”
  • Kara: You’ve raised a lot of money. You’ve had a lot of interest from acquirers. Why didn’t you sell to Facebook?
  • Evan: I have a big thing about building sustainable companies. And I think that’s what Twitter should be.
  • Walt: So in five years you won’t have sold this? You’ll still be running it?
  • Evan: Yes. I didn’t expect to be working on this when I spun Twitter out of Odeo. But I came back to it because it was the most interesting thing I could work on.
  • Kara: Do you have Zuckerberg-like control of your company, where you have the ability to control your fate and turn down a $1 billion offer from the likes of Microsoft?
  • Evan. Yes. And the board feels the same way.
  • Walt: You sure your board doesn’t want to sell the company within five years?
  • Evan: Sequoia likes to brag about YouTube. But they also aspire to start companies like Apple and other cool companies. I think VCs like to brag about starting big awesome companies.
  • Biz: When we met Bijan Sabet at Spark, I remember telling Ev that I liked him a lot. And Ev met him and said “he’s a little too nice.” Then we met the rest of the guys. [Pause]. And then we were in.
  • Kara: What’s next big delta for you, the next big innovation?
  • Evan. We’re not doing a TV show. We look at that like an iPhone platform that can have apps on it, but we’re not doing a show ourselves.
  • Biz: I think the next big thing is scaling this company.
  • Evan: Definitely scaling the company. We’re 45 people. We need to make the product better, we need to solve the awareness-to-engagement ramp. We also want to deepen the value proposition. There are lots of head-slapping things we can do to improve the product.
  • Walt: I was Twitter skeptic. But I really go into it when my colleague Katie told me that this was an interesting way to keep up with news. Is that something you can build on?
  • Evan: That’s the big secret for people like Kara’s mom, and we can do a better job of explaining that. Twitter disseminates information and it builds relationships. You can do one or both of those things.
  • Kara: Do you need to raise more money?
  • Evan: Well, we need to start building a monetizable business.
  • Kara: When does that begin?
  • Evan: There will be a moment when we turn something on.

547164613_bfsvi-m

  • Time for Q&A: Roger McNamee from Elevation Partners begs the guys not to do midday planned maintenance outages. He also asks them to scale faster and to hire more than 45 people.
  • Evan: Go to Twitter.com, and you’ll see that we’re hiring. We’re not planning on staying at 45 people.
  • Q: What do you think will be key way you bring in money in a couple of years?
  • Biz: You need to leave room for emergence to take place. We’re doing that in the way we structure the company and the way we hire people, etc. I’ve always said that if we described Twitter in three sentences, the first two would be about not putting too much fidelity on it, and the last sentence would be “we don’t know.”
  • Q: What about an Apple-like App Store for Twitter, where you guys could sort and authenticate apps?
  • Biz: I think exposing apps to people would be a good idea. I don’t know about charging for it. We know that certain apps make Twitter work much better for people, and we should promote them and point people to them. “I would like to do that right now. I don’t know how soon we’ll get to it.”
  • Q: Not really a question, but a plea to not abuse the access to personal data that Twitter already has.
  • Evan: We know not kill the goose. There are things that we could do that would be really stupid, and that would be dangerous, but those aren’t even the most tempting things to do.
  • Q: In traditional media and marketing, we have tools to prove the value of different tools. How to tell marketing clients that they’re reaching the right audience, etc.?
  • Biz: Start by typing their name in Twitter search and showing them how many people are talking about their product. They’ll immediately want to respond. That’s the easy answer.
  • Q: What about looking at Nielsen-like partners to help refine metrics and tell marketers who’s looking at what?
  • Biz: There are lots of interesting things we could do. I think that it will be more compelling when you’re not just following a set list of people. Twitter will be more interesting when it starts telling you things like “You go to Whole Foods a lot…maybe you’d like to know that this is on sale today, etc.”
  • Evan: But it will always be recipient-driven.
  • Walt: Biz, please tell me about your name.
  • Biz: I couldn’t pronounce my name, which was Christopher Isaac Stone, and I said “bzzz” and that was that.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

Biz Stone and Evan Williams Session Photos

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