It's a shame to see Twitter putting restrictions on client development via their API (more on GigaOm here). Obviously there's speculation as to what the business reasons might be - and the effect on the ecosystem - the move seems more than likely to be about controlling advertising real estate. The original post is here. 

The post makes some valid points about privacy and no doubt Twitters transition to the consumer mainstream has promted some of this, but it still seems to be unfortunate step.

Quote from Ryan Carver (via techcrunch): 

“We need to move to a less fragmented world, where every user can experience Twitter in a consistent way.  This is already happening organically – the number and market share of consumer client apps that are not owned or operated by Twitter has been shrinking,” he writes.

While that might make some sense - mostly likely because it gives Twitter closer control over the Ad real estate associated with the last milimetre to the customer - the twitter client is (almost) the new browser. No doubt this is a major driver - Facebooks monetisation prospects w.r.t. Twitter are simply so much greater simply because most people experience Facebook on almost entirely Facebook controlled real estate. 

Promoted tweets may be one way of advertising but they are annoying for users and interupt the application itself - whereas "out of band" ads on the side of a device attract less ire and can be omni-present. 

The question is - does this make good business sense? and does it signal bad news for "open API" strategies?

The twitter team are smart and no doubt a lot of thought has gone into this change and the perceived economic benefits must have outweighed the risks/negatives (developer anger, loss of innovation and goodwill). However firstly it seems unlikely that this means bad news for the open strategy (that's what got twitter here in the first place and this restricts one dimension of the APIs usage), further for a couple of reasons I think it's a bad move for twitter itself: 

• The loss of developer trust and confidence is not to be underestimated - and although this would seem not to affect "niche" clients for specialist devices/environments (which Twitter will never likely cover), people will be much less free with their innovation.
• The move defacto forces existing twitter clients to integrate other services in addition to twitter - when many might have been content to stay twitter only. 
• Twitter is betting on it's clients being one of the "goto" apps on any device going forward (alongside facebook, the email client, google search etc.) but this is by no means a given - particularly if the number of twitter client options drops. Over time there is a significant risk the facebook and others squeeze twitter into the background (particularly if they offer a channel to twitter).  

There seems to me to be no good reason why Twitter could not have continued to innovate heavily on it's own clients while giving everybody else free reign - if they were better, they'd get more audience. In fact it's precisely the biggest reach clients like TweetDeck which Twitter hasn't restricted. 

So given there is money to be made from ads and the last milimeter to the user, what should Twitter do other than what it has? In my view the right strategy would be to permit and even encourage client innovation but to add revenue share restrictions and requirements on openning up ad real-estate where possible. E.g. 

1. Allow development of twitter clients and use of the API.
2. Provide additional APIs for advertising feeds (potentially provided by 3rd party ad networks).
3. Require clients seeing any kind of volume to either carry ad inventory or pay pay volume fees. 

This is obviously harder to enforce than a blanket "ban", however Twitter's current approach is likely to lead to a "smaller" pie with more for twitter rather than a "larger pie" with more creativity in terms of business models. 

Hopefully in time the decision will get reversed and API innovation will flow once more!