Twitter CEO Dick Costolo: We’re Not a Media Company. We’re in the Media Business.
Twitter CEO Dick Costolo is warming up the hot seat tonight at our D:Dive Into Media conference in Dana Point, Calif. A liveblog of his interview with Peter Kafka will be here, starting at 6 pm PT.
While you’re waiting, watch:
6:12 pm: We’re just about to get started.
6:15 pm: Here’s a photo from inside the Ritz-Carlton Ballroom, where D: Dive Into Media is about to get under way.
6:18 pm: Here’s a photo of Dick Costolo and Kara Swisher backstage in the Green Room.
Okay, now that our live attendees have gotten a drink and a bite in them, we’re ready to start for real. Sorry for the delay! Feel free to drink along at home.
“Don’t worry if you have to go to the bathroom,” says Kara. “Rupert is in the back, tweeting the entire event.”
She’s kidding, but we’ll be here liveblogging and posting news stories until our fingers go numb.
Right now, we’re showing a video expose, made with Funny or Die, on the excesses of D conferences. Big takeaway: Jason Kilar is a fantastic actor. Will post this online as soon as I get the code.
Also, Martha Stewart is a great sport.
And now, the man we made you wait for (sorry!): Dick Costolo. (Consider the comments paraphrased unless they’re in quotes.)
Peter Kafka: You had a partnership with Google, and now you’re having a public fight [over inclusion of social data in search results]. What happened?
Costolo: There are about 900 people working at Twitter now, and it’s just a matter of fact that Google happens to be the company from which more Twitter employees are drawn than any other. About 80 or 90 came from Google, including myself. And we look to Google as the shining light on the hill.
We think that when people are searching for things like @itunes or if they see a hashtag on a billboard, people are going to go to Google to look for them, and we think they should go where they want to.
Regarding access to data, Google crawls us over 100 million times per day; the Googlebot has more than three billion pages. They have the data, I think, that they need.
We just weren’t able to come to an agreement on the details.
Kafka: Are you guys going to end up in the same war with Google as Facebook?
Costolo: No, it’s not a zero-sum game. He compares it to dealing with people in the Twitter ecosystem. We’re growing faster than we’ve ever grown before, irrespective of anything Facebook or Google is doing. All these companies can coexist.
Kafka: What’s the deal with this selective tweeting policy?
Costolo: There’s been no change in our policy. What we were announcing was a capability we now have to leave the content up for as many people around the world as possible while adhering to the local law.
“This is purely a reactive capability. We don’t proactively do anything.”
Costolo says Twitter is already blocked in Iran and China, and he doesn’t see a way under the current system that Twitter would ever operate in China.
The point is: This capability isn’t a prelude to trying to go into China.
Kafka asks for some more hypotheticals, and Costolo gets more emphatic, calling Twitter’s policy “the most honest, transparent and forward-looking way.”
“When we get a legal order that is valid, we will try to make sure that all the tweets are viewable in as many parts of the world as possible.”
6:42 pm: Kafka moves on to SOPA and PIPA. Costolo proposes a summit in San Luis Obispo for Northern and Southern California to meet. He says, less in jest: “It’s certainly the case that piracy is an issue for content creators. However, the SOPA and PIPA legislation we view as flawed legislation that wasn’t written with the perspective of both sides of the debate.”
Costolo adds that Twitter has more than 45 people working in its trust and safety department, and it abides by copyright laws.
Kafka: What could you have done instead of blacking out your site to protest SOPA?
Costolo: There were 3.9 million tweets that day, Wednesday, about SOPA and PIPA. When you’ve got an amplifier like that, you don’t pull the batteries out of the microphone.
Kafka: You’re a media company — are you comfortable with that assessment?
Costolo: We’re not a media company. We’re in the media business. We distribute traffic. We’re one of the largest drivers of traffic to all sorts of other media property.
For more on Costolo’s comments about Twitter and censorship, check out this post.
By the way, this might be hard to convey via liveblog, but Costolo is continually giving Kafka a really hard time about everything — his voice, the chair, the microphone. He is determined not to do a straight Q&A.
Costolo is now talking about whether Twitter would do other forms of business besides ads. He says analytics and commerce are options.
As for the advertising business itself, “It’s growing incredibly well.” Ad units are: Promoted tweets in timelines, promoted accounts and promoted trends. “They perform up and down the stack for brand advertisers; display advertisers, they work well,” Costolo says. Now it’s all about scaling.
Ads first came out in April 2010, Costolo notes. An ad with Barclays a couple of weeks ago, he says, had over 50 percent engagement and continues to. Ads are rolled out to 100 percent of users of Twitter.com.
Kafka: There doesn’t seem to have been any outcry about that.
Costolo: No, our ad quality is good. Plus, people learned about how to market and promote on Twitter before we had advertising, so they already “understand its real-time nature.” We think we can create a lasting company if we just scale this business.
Kafka asks about profits; Costolo says “no comment” a bunch of times.
Kafka: Let’s talk politics.
Costolo: “I really think 2012 is going to be the Twitter election.”
The fascinating thing about 2012 — we really saw this during the State of the Union address. When Obama made the spilled-milk joke, there was this collective groan, and we didn’t have to wait for the pundits to tell us that. Republicans live-tweeted. “Tomorrow morning it will be too late to react to what was said the day before.”
Twitter gives people a human element, from Chad Ochocinco tweeting about the Premiere League, to politicians.
Kafka turns to talking about how Twitter works with TV.
“Twitter is the focal point for this shared experience,” Costolo says.
Costolo: Twitter is extending the runway of the conversation. If you look at the trajectory of conversations about “Glee,” it starts before the East Coast airing, then goes to 1,000 percent, then extends across the country.
Now they’re talking about Howard Stern live-tweeting “Private Parts.” Kafka says he tuned in after seeing the tweets, but isn’t sure he would tune in if Stern did it again. Costolo says it’s just the first inning. There are lots of possibilities for how to use Twitter, with new ones coming from Simon Cowell, Republican debates, etc.
Kafka asks about Twitter taking revenue from TV, and Costolo reverts to his everybody-can-happily-coexist thesis. “It’s more about value creation, not value extraction,” he says.
Kafka asks what Costolo thinks of check-in services (I think he means things like GetGlue for checking into TV shows). Costolo says he doesn’t think an overt check-in is necessary; these conversations will just happen naturally.
Kafka: What are you doing on discovery?
Costolo: We just introduced this “Discover” tab. We have so much content now, we need to surface it to people, especially new users.
Costolo says “Discover” should be more personalized based on the accounts you follow, etc. Sounds like something Twitter is working on.
Some challenges for Twitter include finding tweets that end up being world-changing, even though that’s not clear when they first are tweeted. Like the guy in Abottabad who tweeted about a helicopter overhead when the Osama Bin Laden raid was happening.
For more on Costolo’s comments on how Twitter is changing politics, check out this post.
Costolo is now addressing people who use Twitter for consumption only. “That’s great, and we need to encourage more of that,” he says, noting that 99 percent of the people who watch TV don’t also create it. He wants to make Twitter “like checking your watch,” where people glance and then go away.
Integration with Apple has increased engagement, usage, etc., on iOS devices, Costolo says. “They’re kind of a mentor company for us,” Costolo says of Apple, noting Twitter’s inventor, Jack Dorsey, is focused on simplification and clarity, just like Apple.
Kafka: How did Facebook not get that deal?
Costolo: You’d have to ask them. Our conversation with Apple was quick and efficient. We thought it was a fantastic idea.
Kafka: Who’s really in charge, you or Jack?
Costolo: Jack’s focus is on three specific things: Product vision, brand and identity, and representing the company externally. “The fascinating thing about Jack is he’s got all these people out there in the world telling him you’re the next great thing, you’re the next Steve Jobs, and it’s pretty amazing for him to be as open-minded and humble about the product as he is. He is just as likely to come in in the morning and say, ‘I hadn’t thought about it like that, let’s do it your way.’”
Costolo says Evan Williams and Biz Stone are the same way, very humble.
Costolo and Dorsey meet twice a week, once at the beginning, once at the end.
First audience question comes from none other than Kara Swisher. She asks about Facebook’s IPO.
Costolo replies: Mark and Sheryl are doing a great job running that company. It’s a really big company and they’ve had amazing success. I tell our company we need to focus on our own goals. We don’t care about the market window for going public, or whether there is a window. It will be fascinating to see what happens. I’m sure everyone will stay up Wednesday night reading the S-1, but I have to run my own company.
Twitter will probably go public, says Costolo, because the cap table can’t include more than 500 shareholders.
Next audience question comes from a woman who says she’s from Qualcomm, asking about mobile.
Costolo says he thinks Twitter lacks a compelling feature-phone experience, and that’s something it’s working on.
Next question from a Rogers Ventures VC. He asks about analytics.
Costolo says Twitter is trying to be clear that it will provide the core-user experience of Twitter.
Costolo: I’d rather provide a baseline of data, and then other companies can add UI and other things. I think companies try to ascribe too much value to data. It’s not that easy to be in the data business. It’s hard to scale across verticals. So we’re happy for other people to do that.
Now Costolo is asked about PandoDaily’s report about board changes and his “cojones.”
“It’s nice to ascribe to this stuff that I did some crazy ninja move. The reality is much more boring than that.”
Now a question about the rationale for Twitter acquisitions. Costolo talks about adding TweetDeck for prosumer users, and Summify for summarizing what you’ve missed in the past few days. He says he walked into the New York Times newsroom and saw TweetDeck on every monitor, and “thought it was important that we own it.”
Question about enhanced brand profiles (these last few questions have been from other reporters in the audience, but I didn’t catch all their names). Costolo says the idea is to allow brands to use Twitter as a customer relationship management tool, but not have those reply tweets highlighted at the top of their streams.
Last question is about “mobile-first” design, and second-screen mobile users versus people who are truly mobile.
Costolo says Twitter starts with iPhone and Android designs when it works on new products, then moves to everything else. This is a change, he says — Twitter used to go the other direction. It doesn’t design specifically for the “second-screen” experience.
And that’s it! Time to go back to watching television, tweeting and working on your ninja moves.