The latest from TechCrunch
- Twitter Should Decentralize (And Make Money) Via Twitter Server
- Venture Exits Might Be Down, But Total M&A Activity Is Definitely Picking Up
| Twitter Should Decentralize (And Make Money) Via Twitter Server | Top |
| The background debate about whether or not Twitter can actually scale has intensified. More than a year ago I asked “ Twitter At Scale: Will It Work? ” Today Twitter is far, far bigger . And the uptime woes continue. The big problem with Twitter is assymetric following without limitations on the number of connections, which means that a single account can theoretically have a number of followers limited only by the total number of Twitter users. This adds massive complexity to the system. Other services solve the problem by forcing both sides to agree to friendship, a one-to-one relationship. Others, like Facebook, limit the connections to 5,000 as well. But Twitter has no limits on complexity. And since they are a centralized, bottlenecked system, it is both hard to scale and easy to attack . The short messaging format is popular, and it is now part of the web. It should thus be designed and implemented as a decentralized service like most other core web services (email, DNS, blogging etc.). The Internet was built to withstand a nuclear attack, and it is a platform that can’t be owned, attempting to completely centralize a new core service has never worked. As Twitter grows, it needs to be architected more like the Internet. New Twitter COO Dick Costolo says that he believes Twitter can scale in a centralized way, meaning the status quo will continue. But he acknowledges that it is a theoretical debate at this point, and he says that he hasn’t ruled out decentralizing Twitter. We believe decentralizing Twitter solves two problems – it will help the service scale infinitely. And it is potentially a very lucrative source of revenue. Email Is A Business – The Microsoft Exchange Model (Get Your Customers To Pay You And Do The Heavy Lifting, Too): Twitter should look at how email, and commercial email servers such as Microsoft Exchange Server , developed. The business generates $2 billion or more in revenue for Microsoft, and powers the majority of corporate office functions (email, calendar, etc.). Businesses pay a few hundred dollars for Exchange, plust $50 or so per year per user. Plus, the businesses handle all the infrastructure costs (servers, bandwidth, etc.). Twitter should sell Twitter Server just like Microsoft sells Exchange Server. They’d then run their own Twitter node on their own hardware. Twitter likely couldn’t get $50/user/year out of Twitter Server, but they could certainly get more than the zero they are charging now. And they’d move the burden of scaling Twitter to businesses that want a highly stable solution. And users could still go to Twitter.com to create accounts for free, too. They just wouldn’t have the benefit of controlling the data on their own servers, and having the peace of mind knowing that their uptime was conditioned only on their own infrastructure, something under their control. There would be some issues to work out, like the namespace and messaging between parties (If we had our own Twitter server, my user name would have to be something like @nik.techcrunch, or we could just use the existing global namespace – email). Twitter could build and sell a kick-ass Twitter server for corporations and those who wish to control their own messaging and their own brand. But the benefits would be huge. Possibly hundreds of millions of dollars in revenue. And a partially decentralized service that would stay live even if Twitter.com went down. So there are the benefits – revenue, lower operational costs, higher uptime. And there’s one more benefit, too. A decentralized Twitter would suck the air out of the idea that Twitter needs a decentralized competitor. Twitter could own the micro-messaging protocols and core service for the long term. Twitter owns the protocol, the users, the format, the trademarks, the brand and the name – why does it also need to host the whole damn thing? Crunch Network : CrunchBase the free database of technology companies, people, and investors | |
| Venture Exits Might Be Down, But Total M&A Activity Is Definitely Picking Up | Top |
| The value of venture-backed exits (which is almost entirely M&A these days) might be down about 50 percent in the third quarter, but total M&A activity (including public companies) is seeing a noticeable uptick. We ran some numbers on Crunchbase , which keeps track of all announced acquisitions , and in the third quarter $31.8 billion worth of acquisitions were announced, double the amount from the second quarter and up fourfold from the $7.6 billion low in the fourth quarter. That number was even up 23 percent from the year before. Update : Those original numbers were based on a preliminary run. We’ve since done a final run, and the the value of deals in the quarter were even higher: $45.1 billion (versus $15.4 billion in the second quarter). Many of the bigger deals involved publicly traded companies, such as Xerox buying Affiliated Computer services for $5.75 billion, Dell purchasing Perot Systems for $3.9 billion, and Adobe picking up Omniture for $1.8 billion. There were also a lot of biotech and pharmaceuticals deals such as Abbott Labs swallowing Solvay Pharmaceuticals ($6.6 billion) and Dainippon Sumitomo eating Sepracor ($2.6 billion). The actual number of M&A deals is pretty flat at 213 231, which is about where it’s been for the past four quarters. But the average value of each deal in the quarter was $349 million, up 85 percent from last year. So buyers might be more picky, but when they do pull the trigger they are willing to spend more money. And they are more willing to spend money for companies with established businesses, which often means they are publicly traded or have been around a while. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0 | |
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