Bill Gross, a Silicon Valley legend and serial entrepreneur — best known for coming up with the advertising model that now makes Google billions — has gotten some attention lately by buying up Twitter clients, including the recent purchase of Tweetdeck, a popular desktop app. Now Gross’s company, UberMedia, has gotten $17.5 million in funding from some prominent VC firms, including Accel Partners and Index Ventures. It’s not clear what the company’s strategy is, but one thing seems obvious: It’s on a collision course with Twitter, which has shown that it wants to increase the control it has over the Twitter ecosystem.
UberMedia has been through several different incarnations over the past year. At first, when it launched out of Gross’s Idealab incubator last April, it was called Tweetup — and the idea behind the service was to create a kind of AdSense for the tweet-stream, in which “sponsored tweets” could be bought by advertisers and shown alongside tweets that matched a certain keyword or other search criteria. This was a natural fit for Gross, since his company GoTo.com came up with the idea of search-keyword advertising back in the late 1990s. Google eventually adopted this as its own business model (GoTo was renamed Overture and sold to Yahoo for $1.6 billion).
Unfortunately, the idea of applying this model to Twitter was only a great idea for about 24 hours or so: Twitter almost immediately launched its own advertising platform, based in part on the almost identical idea of “promoted tweets.” This meant Tweetup was effectively dead in the water, or at least doomed to second-place status at best. While Twitter said other platforms could run their own ads on their own networks, the company made it pretty clear that it didn’t like the idea.
Over the past few months, Tweetup was renamed UberMedia and started buying up Twitter clients: First it acquired UberTwitter, a popular mobile client; then it bought Echofon, then it bought a “social news” service called Mixx. Finally, last week, it bought Tweetdeck for an estimated $30 million or so. Now the company has gotten funding from Accel — with partner Jim Breyer joining the UberMedia board — and Index, as well as former AOL founder and angel investor Steve Case. All three were also investors in Tweetup, along with John Borthwick’s Betaworks and First Round Capital.
Breyer has said the company is hoping to “work very closely with Twitter” as well as other social-media platforms like Facebook (since some of its clients such as Tweetdeck work with other social networks as well as Twitter). But it’s not clear that Twitter is going to be interested in working with UberMedia; the company has made it obvious that it wants to control as many aspects of the Twitter ecosystem as it can, including the mobile space, where it bought the number one Twitter client for the iPhone, and in the process caused some considerable upheaval in the ranks of third-party developers.
Co-founder and former CEO Evan Williams later admitted that the company “screwed up” that process, but Williams is no longer in charge of the company; former Chief Operating Officer Dick Costolo, the architect of the network’s advertising strategy, is now the chief executive, and he doesn’t seem inclined to take a laissez-faire approach to potential competitors such as UberMedia. Although it didn’t appear to be directed at Gross or anyone else in particular, Twitter announced recently that it will no longer be “whitelisting” new apps for the Twitter API, which provides access to the network’s data feed. Developers will now have to find other methods, including paying for access.
What does Bill Gross have in mind for his new empire of Twitter clients, which Loic LeMeur of Seesmic (another social networking client similar to Tweetdeck) estimated accounts for about 20 percent of the traffic on the network? Gross isn’t saying, but angel investor and Hunch.com CEO Chris Dixon thinks that the company might be looking at creating a competing network — like a for-profit version of the open-source service Status.net — where it could monetize its own stream without having to ask Twitter for permission. Whatever its plans, UberMedia’s relationship with Twitter looks like it could be anything but smooth.
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