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Summary:

The insanely popular messaging service that still hasn’t unveiled a business model has now yanked the critical SMS part of its offering from…

The insanely popular messaging service that still hasn’t unveiled a business model has now yanked the critical SMS part of its offering from another country, complaining of “out-of-control Canadian SMS costs”. Twitter stopped out-bound SMS to the UK, Australia and elsewhere outside the US back in August after finding SMS termination rates not to its liking. Founder Biz Stone wrote last night he was “surprised” by Canadian charges: “Please understand that we did not mean to pull the rug out from under you. We would have preferred to take more time communicating this change but we had to act quickly and responsibly.” As it grows, Twitter seems unwilling to spend cash on those fundamental SMS charges, despite raising a total $20 million so far. Stone conceded: “It’s clear we have work to do on our SMS offerings.”

  1. Twiiter is cool. It's not new, there have been others. But it has one huge cool difference to all the other attempts at this type of service. It's free :O. But wait… there's more. It's better than free. They actually pay for your messaging. But wait there's even more… it gets even better. I can use it to promote my business and they pay for that too. This is the Sana Clause of all mobile services :-) In 2001 when we launched something a bit similar in a small market it went well, but users paid for each message. The service still runs and is financially successful, but much smaller than twitter. In July 2001 we agreed with a couple of carriers to let it run free for 3 days. The resulting volumes increased by a factor of 60x and were ramping like crazy. It maxed out the SMSC's and scared the *** out of the operators. We agreed to "never do that again". Free services don't have a minor volume advantage over paid – the advantage is huge! In 2004 we did the same with the WAP version of the product. While free, user acquisition grew to 5,000 per day and this was ramping, plus it was maxing the wap gateways..
    Twitter seem to have been so naive, that they didn't use the business logic that hundreds of businesses used before "This will go great guns, but will cost us lots of money". So look guys, if you are concerned and surprised that the carriers want to earn money out of messages, just remember – it's always been this way. You probably just forgot to check that small detail when you designed your service :-)

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  2. RGB,

    I'm curious, what was the name of your service? And why did it stop, seems odd to me that it would be because it was *too* successful?

    –AP

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  3. lahore

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