Twitter just changed its rules to prohibit third parties from injecting “paid tweets into a timeline on any service that leverages the Twitter API.”
The new rule blows a huge hole into lots of startups, particularly ad networks like 140proof and OneRiot.
Twitter CFO Dick Costolo explained the rule change in a blog post:
Why are we prohibiting these kinds of ads? First, third party ad networks are not necessarily looking to preserve the unique user experience Twitter has created. They may optimise for either market share or short-term revenue at the expense of the long-term health of the Twitter platform. For example, a third party ad network may seek to maximise ad impressions and click through rates even if it leads to a net decrease in Twitter use due to user dissatisfaction.
Secondly, the basis for building a lasting advertising network that benefits users should be innovation, not near-term monetization. Twitter is uniquely dependent on and responsible for the long-term health and value of the platform. Accordingly, a necessary focus of Promoted Tweets is to explore ways to create value for our users. Third party ad networks may be optimised for near-term monetization at the expense of innovating or creating the best user experience. We believe it is our responsibility to encourage creative product development and to curb practices that compromise innovation.
It is important to keep in mind that Twitter bears all the costs of maintaining the network, protecting the Tweet stream against spam, supporting user requests, and scaling the service. Indeed, Twitter will bear many of the support costs associated with any third-party paid Tweets, as Twitter receives support emails related to anything a user sees in a tweet stream. The third-party bears few of these costs by comparison.
Later in the post, Dick writes, “We understand that for a few of these companies, the new Terms of Service prohibit activities in which they’ve invested time and money.”
In a tweet, angel investor Chris Dixon put it another way: “Twitter has now reduced the number of companies trying to figure out their optimal business model from thousands to 1.”
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Correction: An earlier version of this post suggested that startup TweetUp might be in trouble. But TweetUp sells ads against Twitter search results and that hasn’t been banned (ahem, yet.)