Discusses how to leverage the Twitter ecosystem that is already generating revenue by monetizing the Twitter API through a premium Twitter Developer Program. Submission to the Silicon Alley Insider Create Twitter's Revenue Model Contest.

1. Monetize the Twitter API
Sachin Rekhi
http://www.sachinrekhi.com

2. Is Twitter Making Money Today?
NO
http://www.sachinrekhi.com

3. But The Twitter Ecosystem Is!
Advertising in Tweets
Desktop Clients
- $14.95
- $25
Funded Startups
iPhone Clients
Tweetie - $2.99
Summizer - $2.99
Acquired Startups
Twittelator Pro - $4.99
Tweetsville - $3.99
http://www.sachinrekhi.com

4. Monetize the Twitter API
• Twitter should monetize the channel that is already
generating revenue for the ecosystem
• By launching the Twitter Developer Program, Twitter
can extract revenue from its partners by providing
them with frequently requested benefits
• Creates a healthy ecosystem where Twitter
encourages platform apps to monetize
http://www.sachinrekhi.com

5. Successfully Monetized APIs
• Microsoft paid partners • Provides APIs for third
get access to discounted party publishers to accept
developer tools, free PayPal transactions and
marketing of their payments
products, and access to • Monetizes every
premium support transaction by taking a
• Microsoft charges for variable percentage
every product that wants
the Certified for Windows
seal to gain customer trust
http://www.sachinrekhi.com

6. Successfully Monetized APIs
• While anyone can develop an app for free, Apple
requires all developers that wish to publish to the
App Store to join their iPhone Developer Program
• Developers pay between $99-$299
• With 15K apps and growing, its a several million
dollar opportunity
http://www.sachinrekhi.com

7. Successfully Monetized APIs
• Facebook Platform’s Application Verification Program
provides developers with a badge to encourage user
trust of the app, increased distribution allocations for
all viral channels, and an advertising credit
• At $375/app/yr and over 48K apps, that’s tens of
millions in annual revenue
http://www.sachinrekhi.com

8. Twitter Developer Program
Benefit Details
Commercial Use Only applications that have registered for the
developer program will be allowed to use the Twitter
API for commercial use (ex: charging for your app,
advertising in your app). Non-commercial use will
always be free.
Twitter App Directory As part of launching this program, Twitter will launch a
full app directory that allows any app developer to
add their Twitter mashup for easy app discovery by
twitter users.
Developer’s who are part of the developer program
will be eligible to apply for the certified app program
to get a badge to increase trust with users and will
also receive premium placement in the app directory.
http://www.sachinrekhi.com

9. Twitter Developer Program
Benefit Details
Increased Rate Limits Developer program participants will have increased
client rate limits (currently 100 requests/hr) and
developer rate limits (currently 20,000 requests/hr) to
improve user and developer experience.
Technical Support Program participants will have priority access to
developer technical support to support their
application development.
Access to Firehose API A premium developer program will be offered for
those key partners that need access to the proverbial
“firehose” that gives them access to all non-protected
tweets.
http://www.sachinrekhi.com

10. Twitter Developer Program
Plan Pricing Features
Twitter Developer Program $199 -commercial use
-app directory
-increased rate limits
-technical support
Twitter Developer Program Pro $9,999 -commercial use
-app directory
-increased rate limits
-technical support
-access to firehose API
http://www.sachinrekhi.com

11. Size of Opportunity
Monetize the Twitter API - Size of Opportunity
Plan Type Plan Price Year 1 Year 5 Year 10
New Units Revenue New Units Revenue New Units Revenue
Twitter Developer Program $ 199 200 $ 39,800 5,000 $ 995,000 20,000 $ 3,980,000
Twitter Developer Program Pro $ 9,999 20 $ 199,980 500 $ 4,999,500 1,000 $ 9,999,000
220 $ 5,500 $ 5,994,500 21,000 $ 13,979,000
Totals 239,780
http://www.sachinrekhi.com

12. FAQ
Won’t charging developers discourage Twitter mashups?
No. Even under this program, the Twitter API will always be available for
free use. Developers can continue to sign up and tinker with the APIs to
their hearts content. Only when they wish to use the Twitter APIs for
commercial use or are looking to further promote their application will they
be charged. And at that point, they are likely to be generating revenue from
the Twitter platform and it is fair to share that with the platform.
http://www.sachinrekhi.com

13. FAQ
Aren’t there larger Twitter revenue opportunities?
There definitely are opportunities that will generate significantly more
revenue than the developer program. However, these other potential
opportunities have significant risk, as they require introducing new
unproven commercial concepts to Twitter. Developers are already making
money today in the Twitter ecosystem and asking developers for a share of
that has reduced risk.
In addition, this revenue opportunity is not detrimental to the user
experience as many alternative revenue opportunities may be (ex:
charging users for access to Twitter features or introducing advertising).
http://www.sachinrekhi.com

14. FAQ
Shouldn’t a SLA be part of the developer program?
I think introducing a service legal agreement for developers has historically
been an important part of developer programs. Amazon Web Services, for
example, provides such an SLA. I also think that Twitter should consider
adding this to the developer program over time.
However, it may still be too early to introduce an SLA for Twitter as it
continues to improve the robustness of its infrastructure.
http://www.sachinrekhi.com

15. FAQ
Aren’t you capping the upside of the opportunity by charging a fixed
fee instead of a percentage of revenue for developers (as Apple
charges for iPhone apps)?
While I agree that the upside is artificially limited in this early version of the
developer program, lack of control and simplicity are two reasons to at
least initially launch with this approach.
Unlike Apple where they have full control of the app store, Twitter does not
have control over much of what goes on with its mashups. Therefore it
would be difficult for them to charge on a developer revenue basis.
In addition, a low fixed price point provides a simpler model for all
developers to understand and adopt.
http://www.sachinrekhi.com

16. FAQ
Third parties are already building Twitter app directories. Why should
Twitter build one itself?
As the success of the Facebook, iPhone, and Android platforms have
taught us, platforms succeed when there is a comprehensive, easy-to-use
app directory for application discovery and installation.
While there are several third parties building this, no one app directory is
comprehensive. By Twitter providing one, everyone will be encouraged to
simply submit to the one official directory. In addition, Twitter can provide
consumer trust by ensuring apps listed on the directory behave well, aren’t
malicious, and then advertise these benefits to users.
http://www.sachinrekhi.com