StockTwits peels off Twitter: Will others follow?

When one of the best recognized Twitter-centric applications decides to relaunch itself as a desktop client that no longer relies on Twitter, what does this mean? That's exactly what StockTwits did this week with the unveiling of its desktop software, a product that TechCrunch reviewed as a sort of Bloomberg terminal and chat system for the trading masses.

StockTwits formerly rode on top of Twitter and allowed users to follow tweet streams by ticker, hastag or user. It created a filter system that made it easier to manage and limit down tweets to cater to the specific interest of a trader and to build communities around specific trading topics. The new backend will function outside of Twitter, leading to an obvious question: if StockTwits no longer needs Twitter, then who does? Perhaps more importantly, is Twitter the next AIM? Like the popular messaging app, it has a lot of staying power and easy to copy; similarly, it is nearly impossible to make money on because its so fungible and easy to copy.
TechCrunch speculated that the shift was due to the unreliability of Twitter, which has network outages almost daily. While StockTwits users can post their views on Twitter with a simple checkbox on the post page, this function essentially reduces Twitter to nothing more than a checkbox and only one means of achieving a tweet. Thus, rather than being a mega-revenue generator, Twitter may actually end up being one of many front-end mechanisms to access a stream of tweets that mix and match across multiple platforms and venues.

The difficulties of monetizing Twitter have already been discussed ad nauseum. In private papers published online by TechCrunch, Twitter executives laid out an ambitious revenue plan that would quickly lead Twitter into the ranks of companies grossing $1 billion per year.

Best-laid plans aside, developments like StockTwits peeling off on its own raise real questions about whether Twitter will ever make real money. AIM has never made real money for America Online (parent company of DailyFinance). And a host of other IM systems from Google, Microsoft, and Yahoo all now interact quite easily, making shifting from one IM to another -- or running multiple IM clients simultaneously -- incredibly simple. As a result, the type of IM client someone uses is now totally irrelevant, so charging for IM client use has become only possible if one charges for archiving or enterprise functions that don't generate a whole lot of money.

Aside from StockTwits, Yammer and other microblogging companies are seeking to capitalize on Twitter's inability to create services for smaller communities or businesses that want a more customized experience.

Facebook is already competing directly with Twitter and others will surely follow as interoperability between microblogging platforms take off. Twitter was a brilliant concept and its going to have legs as a means of communication. But the low barriers to entry problem are now becoming more obvious and making it harder for Twitter to create a defensible business plan.
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