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With today’s news that Twitter has acquired TweetDeck for ~$40 million, it has become clear: UberMedia’s Bill Gross – the Bill Gross who’s famous for inventing search advertising as we know it – seems to have blown it this time around.Last spring, Gross launched a startup called TweetUp. It was going to serve ads on Twitter, or something like that. A couple days later, Twitter announced plans to kill a lot of the startup that had sprung up around it and ban TweetUp’s ads from its site.
No worries. By summer 2009, Gross had changed the company up. He changed the company’s name to PostUp. He had a new idea: he’d roll-up all the third-party Twitter clients and put the ads there.
This plan started off well enough, and PostUp acquired popular Twitter clients like Echofon, UberTwitter, Twidroid, and a bunch of others. Somewhere along the line, Gross changed the company’s name again, this time to Uber Media.
Things really started cooking for Uber Media and Gross at the beginning of this year. Three good things were going on.
- Twitter’s business development team was finally playing nice with Uber Media.
- Uber was in talks to raise money from Accel, the fancy VC firm that first backed Facebook.
- Uber was also in talks to acquire TweetDeck, the most important third-party Twitter client.
But then, almost over a single weekend in February, everything went kablooey.
First, TechCrunch reported the Uber-TweetDeck deal as done. Then, on Monday, we reported the Accel funding of Uber-Media.
It was all too much for Twitter, which suddenly started looking at UberMedia less as an application on its platform, and more as a potential competitor.
Twitter couldn’t do anything about Uber’s big Accel round, which ended up closing, but it did come to TweetDeck with a bigger counter-offer. Then, in a move that probably helped TweetDeck decide life would be better as a Twitter-owned client, Twitter booted UberMedia apps off the platform for several days over minor violations.
Eventually, to no one’s surprise, TweetDeck took Twitter’s deal. Today CNN reported the deal as done.
So what went wrong? Bill Gross is a widely-revered tech business genius. As we noted before, he’s the one who came up with the idea to sell keyword-targeted ads next on search results pages. That business is now worth $30 billion a year to Google.
So how did Bill Gross and his UberMedia team miss this one?
In the opinion of a source close to the TweetDeck side of the TweetDeck-UberMedia negotiations, Gross and his team made three big mistakes.
- Right from the get-go, they antagonized Twitter by launching TweetUp ads less then a week before Twitter planned to announce its own ads product. “Their method is to punch first and try to have a conversation later,” says our source. Later partnering with Accel Partners – viewed as part of the “Facebook Mafia” by Valley insiders – didn’t help the relationship.
- Our source thinks UberMedia leaked news of the TweetDeck deal to TechCrunch in an effort to drive down the price, but that this back-fired, and only served to scare Twitter into action. A source close the UberMedia side of the negotiations says someone on the TweetDeck side leaked the deal to TechCrunch – perhaps TweetDeck investor and “blabbermouth” Ron Conway, who also runs a huge fund full of Twitter stock called RC Chrip.
- Our source says UberMedia got “too cute” in negotiations to buy TweetDeck. The source says Uber got too used to buying small apps from entrepreneurs who didn’t know what to do next. “They could have had TweetDeck, but they dicked around for a long time. They tried to roll us over a barrel.”
So, what’s next for Uber?
Chastened by combat that didn’t go well, the company seems like it plans to try and live peaceably within the Twitter ecosystem as Twitter would like that ecosystem to operate.
A source says the prevailing question at Uber right now is: “Now that [we’re] boxed in, does Twitter let [us] scoot along? “Or do they deliver the final blow?”