Twitter’s $500m takeover talks with Facebook may baffle its non-users. While Twitter has a devoted community of millions, sceptics have dismissed its 140-character “micro-blog” posts as nothing more than Facebook’s existing status update feature. Both allow people to answer Twitter’s central question: What are you doing?

For Twitter’s co-founder, Biz Stone, the answer seems to be “quite a lot” towards making a greater distinction between a feature and a business.

Speaking during the annual Silicon Valley comes to Oxford event at Said Business School, Mr Stone refused to discuss the Facebook reports. But he did say that Twitter has finally moved on from fixing its frequent service interruptions. Twitter is now looking at how to create a richer experience, to win over those sceptics - and start making money.

Until recently, bringing new features to Twitter has taken second place to keeping the service online as it attracted new users. Innovation has largely come from third parties, who have used its API (which allows developers access to the Twitter back-end) to create new applications to post to Twitter, track contacts or display posts on maps. Such has been their success that Twitter gets 20 times more traffic through its API than to its own site.

“Now that we have stabilised the technology, we are finally able to start focusing on creating a sustainable company,” Mr Stone tells the FT.

Twitter will be “iterating on revenue products”, he says – trying several approaches to see what works. It’s a philosophy that stems from his time at Google, and also from Twitter’s own gestation as an accidental by-product of Odeo, an erstwhile podcasting company.

Twitter’s first commercial targets are companies who have set up Twitter accounts - such as Comcast, JetBlue and Dunkin Donuts - which they use for a combination of marketing and customer support. Mr Stone hopes Twitter can “help [brands] to do it better… This is something we want to move towards because it creates value for our users, commercial account holders and potentially for us.”

Twitter has raised three rounds of funding and grown to 26 employees but is yet to generate any revenues. “We aren’t worried about it,” says Mr Stone. “We think there is a lot of opportunity there, we think of it as an opportunity not a problem. We have enough money in the bank to be able to work on doing this for the amount of time we need to…. We are cautious in this [economic] environment but we are not freaking out. In the third round of funding, we sensed something was coming and said we had better be safe and raise enough money to do the things we need to do.”

One of those aims is to grow the network tenfold in the next year. So Twitter is working to improve its user interface, which has evolved little from the basic sketch that sparked the idea in 2006.

It is adding search and links to popular topics to Twitter’s start page, to make it easier for new users to understand. “Half the people that come to Twitter say: ‘What is this?’” admits Mr Stone.

Twitter’s ability to spot trends in its thousands of simultaneous discussions was demonstrated during the US elections, he says. A special Twitter site brought together posts from the candidates, lists of the most popular topics, and charts tracking spikes in Twitter discussions about particular topics as they were raised in presidential debates.

By adding information about global trends and local topics of discussion, Mr Stone hopes to “convert the naysayers who look at an individual [post] saying ‘I’m having toast and Marmite‘ and say: ‘Who cares?’”

Tags: Facebook, twitter

November 25, 2008 1:14am in Digital media, Internet | Comment