The document outlines a strategic analysis for Twitter to ensure its competitive advantage in the microblogging market over the next two years. It suggests partnering with Facebook, introducing enterprise services, and enhancing features such as groups to bolster user engagement and profitability. Additionally, it emphasizes the importance of brand recognition, network effects, and potential risks from competitors, particularly Facebook's encroachment in the microblogging space.

2. Twitter strategy Just a starting point Case study for internet startup strategy Other interests How screwed is Detroit and the US auto industry? What mobile platform or strategy will win? When and how will renewable energy be sustainable?

4. Considering the results of a quick strategic analysis, what should Twitter do today to emerge as the “winner” in microblogging two years from now? WINNER = most users and greatest profits

5. Partner with Facebook for deep integration of enhanced Twitter application Why? Mutually beneficial relationship For Twitter: Access to existing ad platform, access to Fb’s huge user base, raised awareness, and further viral Twitter adoption For Facebook: Satisfy user needs for microblogging social network features Risk of inaction: FB is not likely to sit out on the microblogging party It could roll its own Twitter clone by enhancing the Status Updates feature If this offering successfully leverage Fb’s network effects, it could pre-empt Twitter’s adoption by mainstream FB users How? Features such as Two-way updates (from Fb to Twitter and vice versa) Commenting/@replies shared between Fb and Twitter Twitter integration with Fb groups (e.g. using unique @groupnames) Fb shares ad revenues with Twitter based on the volume of Tweets viewed in status feeds on Fb.com

6. Create Twitter Enterprise service for internal usage by companies for collaboration Why? Prevent “Microsoft effect” from boosting other microblogging players (e.g. Yammer) Software used all day at work is convenient to use at home because I already know how (a la MS Office) Businesses will pay for value-added that consumers won’t, allowing Twitter to charge for the service How? Allow for employees to start using enterprise Twitter at their company – without approval of IT managers – and build proof-is-in-the-pudding case studies Enable easy integration of enterprise Twitter with existing business systems Partner with universities to study benefits of microblogging for business productivity, profitability, employee loyalty, etc

7. Add group functionality to Twitter Why? Enterprise Twitter will need groups, anyway Some customers want the feature today and might turn to a competitor to find it Provides more benefit than cost (new/retained users vs lost/deterred users ) Groups will enhance the role of Twitter in organizing and sharing amongst informal social networks How? See Japan

8. Reduce competitive risk by increasing brand recognition and loyalty Why? Brand loyalty strengthens network effects and diminishes risk of substitution for competitors It will be much easier to keep an existing customer with Twitter than to convince someone to switch from another network they’re already using How? Work with media companies to promote the use of Twitter E.g. CNN, CurrentTV on television This use of Twitter by business is already occurring organically – let’s make it even stronger by actively supporting it

9. The following slides contain Notes Basic strategic analysis 5 Forces Analysis Scenario planning

10. Commercial accounts Premium services for businesses using Twitter to communicate with customers Provide analysis and tracking services to provide business information Freemium Free base level service, paid premium service Premium API and branded clients Pay for access to API over certain volume of requests or for commercial purposes Twitter-branded clients on “closed” platforms like most mobile phones Share fee or subscription revenue with mobile provider Advertising Intermittent in-line tweet-ads in timeline or to SMS Enterprise version Corporate Twitter with admin controls and pay-per-user fees Archiving, permissions, security, confidentiality, integration Partner with (or sell to) Facebook Integrate Twitter with News Feed Share revenues from News Feed advertising Others?

11. Why is scenario planning a valuable tool for strategy planning at Twitter? Uncertainty is high relative to executives’ ability to predict the future of the business There are diverse, merit-worthy opinions regarding future strategy The industry is incurring change at a significant rate

12. Scope Product and market: Twitter and the microblogging market Timeframe: next two years Stakeholders Twitter, customers, suppliers, distributors, competitors Trends Continued growth of mobile as customers’ platform-of-choice Increasing use of microblogging by businesses to interact with customers Facebook and MySpace continue to expand user base Increasing efforts by businesses to deploy online collaboration tools to their employees A vast majority of microblogging consumption continues to occur through third-party clients What else?

13. Key uncertainties Will existing social networks add microblogging features? Will an open source/standard microblogging format emerge? Will businesses embrace microblogging as an enterprise tool on a wide scale? Is advertising an effective method for monetizing microblogging? Will consumer customers pay for microblogging services? What portion of the population will adopt microblogging actively? How much will microblogging products change before they become mainstream and stable? Others?

14. Slap in the Facebook World Facebook continues to build mass as the hub of social networking X) Facebook transforms its Status Update feature into a Twitter replacement Twitter adoption is co-opted by Facebook’s entry into the market -OR- Y) Twitter builds Fb app with newfound integration or Facebook acquires Twitter

15. Twitter in the Cloud Behind the Curtain Revenue through paid access to premium API Distributors (mashups and social networks) do the consumer monetization (like ads) Twitter runs a B2B/B2C hybrid business model Twitter is deployed extensively across networks and platforms via its API Hundreds or thousands of Twitter mashups are created Facebook/MySpace + Twitter integration via application platforms Competitors will work to make microblogging open and cheaper/free

16. Microblogging the Microsoft Way Corporate adoption of a given company’s microblogging tool drives consumer usage of that same product due to shared functionality and brand recognition (a la MS Office) The microblogging system with the largest corporate user base wins the consumer game

17. Open Sesame Open standards and open source software for microblogging grow to lead the market E.g. OpenMicroBlogging/Laconica Network with large user base adopts standard and runs servers Google, Yahoo, Facebook, MySpace, Microsoft Adopters cut out Twitter as the “middle man” and use microblogging to drive traffic to their existing properties Microblogging is not a stand alone business See instant messaging

18. Provides a systematic analysis of market structure and competition around a given market segment, company, or industry Limitations Assumes relatively static market structure Does not predict changes in dynamic markets Scenario planning is useful in preparing for unpredictable future situations

19. Barriers to entry and economies of scale are low due to low fixed costs Competitors can be built with relatively little investment Most costs are variable (bandwith and storage) Substitutes Facebook status updates, group SMS, IM, blogs, mobile social networks (Loopt) Brand loyalty still building Building brand equity via mainstream media mentions such as CNN Little to no intellectual property required Distribution over the Internet is open to any competitor Twitter does carry some weight in distribution on platforms by way of being the market leader If only one microblogging tool is integrated, it will be Twitter Switching costs vary amongst users and between consumer and enterprise markets It remains to be seen how much customers value their archived Tweets compared to emails and blog posts Currently microblogging tools are free to consumers, so no product has a price advantage The product is early in its lifecycle so it will be evolving rapidly in the near future This increases the likelihood that one company can leapfrog another Network effect is single greatest strength of Twitter

20. Increase minimum efficient/effective scale E.g. leverage network effects to increase hurdle for competitor newcomers Increase brand awareness to strengthen loyalty E.g. partnerships with major media companies Patent important innovations in infrastructure Create alliances with linked products/services and suppliers/distributors E.g. partner with Facebook, mobile networks Increase switching costs for customers E.g. emphasize value of archived conversation Provide unique functionality not provided by substitute products E.g. searchability of and mashups with timeline

21. Suppliers and distributors of Twitter are usually one and the same. A supplier to Twitter provides users for the service. A distributor spreads messages from Twitter to users. Examples FriendFeed Clients (Twhirl, TweetDeck, etc) Facebook, if Twitter were integrated Facebook has bargaining power as they control a huge base of users interested in social networking Facebook can integrate forward and build its own Twitter competitor (i.e. modify Status Updates) Low barrier to entry to do this today Twitter’s user base is only a fraction of Facebook’s

22. Acquire the supplier/distributor Increase the supplier/distributor’s dependence on Twitter Then start charging them Form exclusive partnerships with supplier/distributors

23. Switching to an alternative product is relatively simple and does not induce high costs (for consumers) Consumer customers are price-sensitive because the service is not essential for doing business (aka life) Business customers are price-sensitive because microblogging: Has not yet proven to increase profitability Is not yet of great strategic importance Twitter is the only choice for customers who want immediate access to a large network of other users

24. Partner with competitors or suppliers/distributors E.g. distribution through mobile company like Verizon Get-It-Now Reduces customer choices available Increase loyalty of customers Increase incentives and value-added for customers i.e. make the product more useful

25. Current microblogging platforms are not highly differentiated by capabilities However, Twitter has the largest base of API partners with clients, analysis tools, etc

26. Acquire competitors Not likely Differentiate with unique features Does any firm have a competitive advantage in developing new features? Differentiate by continuing to grow user network and lead by network effect

27. Built-in short-link creation and analysis Shortened Twitter URL automatically created the first time a given full URL is Twittered Afterwards, the same shortened link is used for the same full URL Allows for simple analysis of linking trends Could create Digg-like popularity ranking Short link sent to mobile but normal URL displayed on web/desktop