Twitter wants cut of ad revenue from developers

May 25, 2010

Twitter wants cut of ad revenue from developersMicro-blogging service Twitter has had a busy couple of days reworking its Terms of Service (ToS) for its API (application programming interface), but no one really saw one part coming that really changes the game for developers.

While everyone was focused yesterday on no more advertisements being allowed inside user’s timelines via the Twitter API, another new clause to the ToS slipped in under the radar.

2. Advertising Around Twitter Content
(a) We encourage you to create advertising opportunities around Twitter content that are compliant with these Rules. In cases where Twitter content is the basis (in whole or in part) of the advertising sale, we require you to compensate us (recoupable against any fees payable to Twitter for data licensing). For example, you may sell sponsorships or branding around gadgets or iframes that include Tweets and other customized visualizations of Twitter

While this is somewhat vague, Peter Kafka of Media Memo spoke with Twitter COO Dick Costolo to get some clarification:

  • Twitter is only focused on sites and services that sell ads against its stream. So if your service doesn’t generate revenue, or does so using something other than ads (i.e., subscriptions, analytics packages, etc.), you’re fine.
  • If you do have to pay up, there are a couple of different ways to do it: You could cut Twitter in via a revenue split or agree to license its data stream, which has generally been free up until now. Or you could agree to use Twitter’s own “Promoted Tweets” ad service. Or some combination of the above.
  • Costolo says the company hasn’t established a minimum fee, revenue split or another metric for payments. So a lot of this is going to get hammered out case by case.

It’s about time Twitter started turning an eye towards making money, and it seems perfectly reasonable to start with the people who have been making money because of it.

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