What the Tweetdeck and Ubermedia/Twitter saga tells us about dependency

By May 25, 2011Exits, Twitter

You have probably seen the news today that Twitter has acquired Tweetdeck for $40m, ending a month or two of wrangling between Twitter and Ubermedia over the business.  As well as being an interesting saga in its own right and a good result for Tweetdeck the whole affair is a good illustration of the perils of being too dependent on a company like Twitter.

Dependency on another company is never desirable, but it isn’t necessarily something to worry about too much if the partner is stable and profitable, and the relationship is mutually beneficial – e.g. Zynga is ok on Facebook.  However, if the partner has yet to find a stable business model or there is any hint of exploitation then then their policies are subject to change in ways that can undermine their erstwhile partners.  Look at the way Twitter’s acquisition of iPhone client Tweetie last year undermined other Twitter iPhone clients and the way Google’s changes to its search algorithm has hurt content farms and other aggregators.

Tweetdeck’s exit was pretty decent.  At some stage I am sure they were hoping for a bigger outcome, but given they only raised $3.8m I’m sure Ian Dodsworth and his investors have all made good money.  I think they were able to achieve this result despite their dependence on Twitter because of the scale they had achieved and because Ubermedia was/is becoming a pain to Twitter and was keen on acquiring Tweetdeck.  The latter condition is pretty hard to plan for and needed to be present for Tweetdeck to get the result it did.

Ubermedia is run and backed by some very smart people, but from what I know it is now hard to predict great things for the company.  They are as dependent on Twitter as Tweetdeck was, but unlike Tweetdeck they obviously felt they needed to fight Twitter to maximise growth, and Twitter has put them in their place both by the Tweetdeck acquisition and by suspending their apps for violating the terms of service.  It is hard to see Twitter acquiring them now.  This Business Insider article does a good job of detailing Ubermedia’s chequered history.

So in summary, of the two Twitter dependent businesses discussed here one achieved a decent result and the other still has an unclear future.  That doesn’t sound too bad, but Tweetdeck did very well to build competitive tension around its exit and I’m left thinking the same as I did before I wrote this post, that dependence on companies like Twitter brings risk to a company and is best avoided/mitigated.  It is for this reason that Tweetdeck’s strategy was to become a social media dashboard.

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