Peter Kafka

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Twitter CEO Dick Costolo Talks About His New Photo Service, But Not About Profits

Twitter’s founders turned a side project into a service with worldwide reach and appeal. It’s Dick Costolo’s job to run that into a business. How’s that coming? And does a business plan really matter if they’re just going to sell to Google? Also: How will the company’s new photo-sharing service work, anyway?

10:46 am: Greetings! Joining a minute late. Walt and Costolo are talking about DARPA planes.

10:47 am: Walt asks about new Pew study saying 13 percent of U.S. adults are on Twitter, up from 8 percent.

Costolo: No third party measures Twitter accurately. We get 13 billion API requests a day. Those go out to third- party clients, etc. We don’t even track where all of those off-network Tweets go. What we do see internally is that we’re growing “much, much faster” than that.

More stats: Mobile usage is up 150 percent since the beginning of the year. It took three years to send the first billion tweets. Now we do a billion tweets every six days.

“We’re growing like a weed.”

10:49 am: Walt: Well, how many Americans are using Twitter?

Costolo: We’re not sharing that number.

10:49 am: Walt: Let’s talk about on- and off-site usage.

Costolo: The majority of use is not on the Web site. We’re seeing dramatic growth in Twitter for iPhone, Blackberry, Android.

10:51 am: Walt: You’ve been buying clients and/or discouraging some developers from building clients, right?

Costolo: We’re encouraging developers to move up the value chain. Today there are 600,000 developers who’ve downloaded 900,000 API keys. There are thousands of Twitter clients. Meanwhile, more and more brands–Virgin America, WSJ, Martha Stewart–are flocking to Twitter. They need all these value-added services, and we want more companies providing those.

10:52 am: Walt: Like what?

10:52 am: Like Radian 6, which provides analytics. Curation: Tweetriver helped E! filter the best tweets to show on screen during the Oscars. Klout, etc. And our point was there are already hundreds of basic clients. We’re encouraging people to build other services. Also, “we’re going to hold you to a higher bar” if you build a client, because people are signing on to you thinking they’re using a Twitter product.

10:54 am: Walt: And now you’re buying some of these guys.

10:54 am: We bought Tweetie a year ago. And we just bought Tweetdeck. We bought Tweetdeck because every newsroom uses Tweetdeck, because it provides amazing research capabilities. Lesley Stahl’s producer told me he was using it last night.

10:55 am: Walt: So should people using your API feel you’re competing with them? What does that say about your bond with them?

Costolo: We have lots of developers. We’re going to have some overlap. We try to signal where we’re going, when we can, so it gives you room, to move up the value chain.

10:56 am: Walt: So no damage at all? No broken trust? And now you’re going to do another competing service, right? Cue video demo.

[To a musical soundtrack, nice-looking young people taking photos with their iPhone, uploading them to Twitter. They show up on some kind of archival page.

Photos, videos, sorted by hashtag on

I should know who’s singing, because I saw him on Jimmy Kimmel a while back. He has red hair and looks a bit fey. See the YouTube video embedded below.]

OK, time to explain what we saw.

10:59 am: Costolo: OK, we now have “Twitter native photo-sharing experience.” “That’s what it’s called, I just named it that now.” Rolling out over the next couple weeks.

We’re doing it to “remove friction” from the photo-sharing experience.

11:00 am: Walt: Is it really hard to add photos to Twitter?

11:00 am: Costolo: Remember that we have a big user base. Also realize that other third-party clients may have different rights than users expect. For instance, with our service, “users will own their own rights to their photos.”

Also, we’ve dramatically improved search on Twitter. Now doing “relevance-sorted results.”

And we’ll do a better job of surfacing all of the context surrounding Tweets in search results.

11:02 am: Walt: So photo stays with the Tweet, right?

11:02 am: Costolo: Yes, it’s part of the metadata.

11:03 am: Walt: And there will be a repository of photos, right?

Costolo: Yep. But not all of your photos, just some, surfaced via algorithm.

11:03 am: Walt: This puts you in more direct competition with Facebook, which is a big photo-sharing service, right?

Costolo: No. Twitter photos are shared in a moment and conversed upon, by lots of people, as it happens, in real time. Facebook is more of an archive of past moments. Like I just said, we’re not going to have an archive of every one of your photos. [Note: Twitter PR tells us photos will actually be hosted via Photobucket.]

[Meanwhile, here’s Twitter’s description of the product.]

11:06 am: Walt: So what will Yfrog and Twitpic think about this?

Costolo: Like I said, there will be overlap. We encourage services to move up the value chain.

11:07 am: Walt: Will you be on all platforms? webOS?

Costolo: No webOS yet. The beauty of Twitter is that it already works on everybody’s device. It works on SMS. You can get Twitter on your phone without even signing up for the service.

11:08 am: Walt: SMS is interesting. Years ago you seemed to stress that much more than you do now.

Costolo: In some cases, services like push notifications are replacing SMS. But for lots of people, and in lots of countries, SMS is crucial. In Haiti, 95 percent of use is SMS.

11:09 am: Walt: Eric Schmidt says Google blew it with regard to identity. Do you agree?

Costolo: I don’t know about Google. In any case, we don’t think about the social graph, we think about the interest graph. It’s a very very different way to think about identity, where I can follow you but you don’t follow me. Or I follow the San Francisco Giants and they don’t follow me.

11:11 am: Walt: So what else can you do with that? Is there an analog to Facebook Connect?

Costolo: Yes, like the new “follow button” we launched yesterday. The “@username” is a powerful construct. You give out lots of information without sacrificing privacy.

11:12 am: Eric Schmidt did not include you in the “gang of four.” How do you feel?

Costolo: “Gang of five” doesn’t sound good, does it? Though he could have called us the “Fab Five.” Also, Reed Hastings didn’t make the cut, and he’s doing pretty good. Also, 20 years ago, in 1991, the gang of four had four different players. So things evolve.

[Sorry, locked out for a second]

11:15 am: Walt: Are you a business?

Costolo: Yes. We’re a remarkably successful business. Over 80 percent of advertisers renew with us. That’s an objective fact.

Costolo using same metrics he’s used in the past to describe Twitter ads: Engagement rates are “orders of magnitude higher” than traditional Web ads.

Their Volvo ad, for instance, had a 50 percent engagement rate.

A Radio Shack promotion ran for one day on Twitter. In the next three days, in-store exchanges and purchases were up double-digits from the day before the ad ran. And the ad didn’t run anywhere else. “These are amazing statistics that marketers just can’t believe when they first hear them…So the business is working phenomenally well.”

11:18 am:Walt: Profitable?

Costollo: Not gonna talk about it.

11:18 am: Walt trying to goad Costolo to talk about money. Dick’s sphinx face remains strong. He’s not gonna talk about it.

[And now a brief digression about DARPA]

11:19 am: Back to business: Middle of last year, we said we’d have 100 advertisers by the end of the year. We ended up with 150 advertisers. Now we’re up to 600. “We’re in no hurry to go make sure [that we jam Twitter up with ads]. It just doesn’t make sense.”

We’re shrinking the world. It used to be that just a few people saw your photo. Now many do. We helped people in Tunisia broadcast what was happening, and they could hear people around the world supporting them.

Another example: During the Google I/O conference, Google sold $55,000 worth of tickets in a few minutes.

“We don’t need to optimize for near term revenue.”

11:22 am: Walt: When are you going public?

Costolo: Reid Hoffman and I were both in coach yesterday, by the way. On IPOs in general–those will all cause media to ask us about when we’ll IPO. The long-term success of the company is not correlated with the success of the IPO. Big IPOs have nothing to do with success of the business.


11:24 am: Q: Is there a value on specific Twitter handles? Can you see a market for specific names?

A: I assume that kind of stuff is already happening without our knowledge [True! I gave away @fakedondraper to a nice person last year.]

Also, we’re working with Mozilla, a Firefox add-on, that brings you to Twitter as soon as you type in an “@name” or a hashtag. We love that people are using @s and #s.

I assume that will mean that markets, “black, grey or otherwise,” will show up around this stuff.

Q: Users own their Tweets. And they own their photos. But please explain (asks Josh Topolsky): Why don’t I have access to old tweets via search?

A: We have amazing search engineers. Rocket science PhDs. And we have the full archive of Tweets. But we have to choose between real-time search and super-fast archive search. We’ve decided to focus on real-time. “Right now it goes as far back as we feel we can rapidly surface real-time results.” But it will go farther and farther back.

We only have 500 people at the company. It’s a resource constraint.

Q: Can you comment on Rep. Weiner’s hacking case?

A: “Commenting on the specific case is an IQ test.” In general, we want users to create strong passwords.

Q: Long soliloquy.

A: Marshall McLuhan quote.

Also: Twitter is to communication as David Blaine close-up magic is to old-timey magicians, far away on a stage. [This sort of makes sense if you hear it in real time. We’ll get video.]

All done! Thanks for reading.

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We’re growing like a weed. We send a billion tweets every six days.

— Twitter CEO Dick Costolo on the growth of Twitter at D9.