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Twitter realizes it needs to make money

Posted by Mike on August 15th, 2008

TechCrunch reported that SMS updates are gone in the UK, as this email from Biz Stone also confirms:

I’ll start with the bad news. Beginning today, Twitter is no
longer delivering outbound SMS over our UK number. If you enjoy
receiving updates from Twitter via +44 762 480 1423, we are
recommending that you explore some suggested alternatives.

He goes on to state:

Before I go into more detail, here’s a bit of good news: Twitter
will be introducing several new, local SMS numbers in countries
throughout Europe in the coming weeks and months. These new
numbers will make Twittering more accessible for you if you’ve
been using SMS to send long-distance updates from outside the UK.

Reactions on TechCrunch UK have been more harsh. What gives? For years any company has been able to get the same short-form (4 or 5 digits) number to receive SMS messages from users in many countries at once, so the first thing Twitter did wrong was to use a UK number to send and receive updates, rather than getting local numbers in its countries of maximum usage. These short-form numbers can be assigned a cost per message that is passed onto the user sending them, so you can charge them anything from the standard 15 Euro cents to over 1 Euro – one step to recoup losses.

The way SMS gateways operate is very simple (see Clickatell for an example). When you open an account with them, they will assing you a short number and a prefix of choice – say 5555 and TWIT. They have this short number assigned by all the mobile operators in the country of operation, so it doesn’t matter what the user’s operator is – they just need to remember the single number and prefix. To send an SMS, a user would type TWIT followed by a dot or a space, and the text. This SMS is received by the network operator, which forwards it to the gateway provider as it recognizes the number to which the message was sent. The gateway operator in turn identifies the prefix, and routes the SMS to your servers. The routing is usually done over a HTTP GET to a script on your web server.

If you have deeper pockets, you can get a number assigned exclusively to you, so you don’t even need prefixes (unless you want to setup your own commands or sub-services).

The second thing Twitter has done wrong is to allow an infinite number of SMS messages to be sent out as updates. As soon as they saw traction, it was the time to introduce the “Premium Account”. A ‘free’ user would get say 10 test SMS updates, after which he’d need to upgrade. A premium user would then get 100 SMS per month, and options to purchase extra SMS packages with discounts on volume. This would easily discern those that really need SMS updates from those who can make do with desktop clients or the web.
It may not be too late to introduce these changes, and they seem to be taking place (at least the local access numbers), but I feel Twitter’s reputation is being damaged by the increased feeling of instability.

You should follow me on Twitter here.

2 Responses to “Twitter realizes it needs to make money”

  1. comment number 1 by: Mike

    I am critic of Twitter just like you are free to be critic about anything you please – I live in a free-speech country. When the time comes to be critic about the things we did wrong at Whisher, I will post. Trust me, I’m not at all jealous about the position they are in, with $15m in funding and a service that is down too often, and which is now going to have features cut off.

    Twitter runs a very popular, very cool service – but they have made some fundamental mistakes in the early stages of the platform design, which I was commenting on. You don’t need to be a genius to figure this stuff out.

  2. comment number 2 by: Paulo

    Amazing! First Fon, now Twitter. Who next Mikel?

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