One of the big stories here at CES is the rise of Twitter as a (the?) key tool for  *companies* to connect to *consumers* as well as the bloggers and industry insiders that flock to Las Vegas every January for the CES show.     This picture is from Wed setup when thousands of technicians set up thousands of exhibit booths here at the Venetian Sands.

Engadget, the official blog for the conference, has some really neat stations set up that show the twitter feed – I think only things tagged with CES related hashtags. UPDATE:  Sorry….I’m not clear on what these stations are showing as it does not appear to be Twitter.

Still, Twitter has mainstreamed so fast – it was the missing application that allows fast and effective communication person to person or person to large group.      I’ll be doing a longer feature on this with more pictures later in the conference over at the CES Blog.

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Jessica Vascellaro at the Wall Street Journal is breaking the news today that the social media mavens at Twitter.com are raising an additional $100 million in venture capital, giving Twitter a new valuation close to  (insert Austin Powers voice here)  one billion dollars.

Jessica notes that previous funding valued the company at about 255 million.    The new funding round not only confirms that Twitter is now a key major online player but will give them huge resources to continue rapid growth and expansion and perhaps even marketing, although one of Twitter’s brilliancies is that it needs an advertising budget of zero.   Twitter is the ultimate “word of mouth” tool for the online generation and everybody from celebrities to businesses are using the tool to create a dialog with fans, customers, and friends.     Where Facebook is powerful as a tool for maintaining relationships with friends and family, Twitter is superior as the fast and superficial way to keep in touch, “shout out” a message to the world, and generally manage large networks of customers, friends, conference attendees, etc.     There’s room for several social networking tools but I think we’ll  see both Facebook and Twitter continue to thrive and grow substantially in the coming years.

As we’ve been noting for some time Twitter represents something of a “perfect online storm”  where timing, simplicity, and social media are combined in a way that appeals to both sophisticated and new technology users.    The last time we saw this combination of innovation with the technological zeitgeist was Google search, and we all know how that turned out.

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Perhaps we’ve written too much here about the microblogging / messaging service Twitter, but I remain convinced that Twitter (and also Facebook with her many new users) represent a mainstreaming of social networking that is a very important development in the evolution of the internet.     People, not technology, are the key to understanding why the internet is so important and no better example is the election in Iran and how Twitter is being used – in spite of massive Iranian Government censorship – to bring news to the outside world and spread messages in the country as well.   CNN Reports that the US State Department is actively encouraging Twitter to maintain uninterrupted services in the hopes of keeping up the flow of uncensored (and often anti-Government) information.  CNN’s Anderson Cooper Reports.

This is not to suggest that Twitter’s offering unbiased reporting of the situation.  On the contrary much of the Twitter buzz is anti-Government and in favor of the opposition candidate and a freeer, more open Iran.   Many Twitter rumors are false as well, but the point is that we’re seeing the service used in a profoundly important and significant way.  More importantly Twitter in Iran is playing a key role as one of the few uncensored outlets.

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Time magazine has a feature about the rise of Twitter as a major growing social routine as well as an impending huge force in American business and culture.    Readers here know I’m already in something of an argument here at Technology Report with the most excellent Jeremiah Owyang of Forresters about this topic after his keynote at the Twitter 140 conference suggesting Twitter is simply enjoying the early buzz from a hype cycle that will relegate the service to obscurity soon.

Not so, say I and I think Steven Johnson of Time would agree.   He’s summed up an important aspect of Twitter very well:

I think there is something even more profound in what has happened to Twitter over the past two years, something that says more about the culture that has embraced and expanded Twitter at such extraordinary speed. Yes, the breakfast-status updates turned out to be more interesting than we thought. But the key development with Twitter is how we’ve jury-rigged the system to do things that its creators never dreamed of.

In short, the most fascinating thing about Twitter is not what it’s doing to us. It’s what we’re doing to it.

A particularly intriguing aspect of Twitter is that in the purely technical sense it’s not really anything all that spectacular.    What makes it special is that it’s changing the way people behave with respect to technology, opening the tech window for many who have been waiting for applications that allow them to express themselves without the bother of blogging, gaming, or interacting with the stereotypical onliners who tend to skew “highly technical” and “young”.

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Reporting:  Joe Hunkins

Here at the first major Twitter conference it’s surprising to hear a very sharp, leading technology watcher so profoundly misunderstand the significance of Twitter, but it’s happening right now in real time.

Jeremiah Owyang, no stranger to Twitter, is using what I’m pretty sure is mostly canned presentation to explain to the enthusiastic Twitter audience that they are mistaken to see Twitter as singularly significant. He’s certainly right that Twitter is not the only social media game in town and that it’s still smaller than Facebook, but I think he’s missing the significance of the trend here. Twitter is growing faster than any major application in history, it already has widespread mainstream and celebrity adoption across most demographic groups, and it is evolving an ecosystem noted more for how it shares Twitter functionality freely with everybody than how it seeks to be proprietary.

Sure, Twitter is currently far more significant as a sociological phenomenon than as a big business tool. Perhaps Jeremiah’s big business focus is getting in the way here, but the global public conservation has begun in a powerful way and Twitter – more than any other application – is the key to accessing that conversation and participating.

Hmm – I’m live blogging this right now during his presentation and he’s changed his tune a bit to (correctly) suggest many of the ways Twitter is now used by companies to engage with customers. I’m wildly guessing the first part of the presentation was created before the rise of Twitter?

Dear @jowyang, Twitter is not over hyped.

Update:  I had a brief chat with Jeremiah and Stowe Boyd (who had also tweeted his disagreement with the “overhyped” tag on Twitter.   Owyang noted correctly that many new tech tools come out swinging with a lot of buzz and are labelled “the next big thing” only to land on the dustpile of obscurity or become only marginally significant after a few years.  But as somebody noted during that talk Twitter is about human innovation, not technological innovation and thus is more likely to withstand the test of time.

Important but unknown data points make the calculations somewhat unreliable, but for me the growth rate combined with the large current size and easy capitalization suggests Twitter has already become something of a mainstream standard that *cannot* die a quick death and is very unlikely to die a slow one.   We needed a standard for chit chatting across the web in the global conversation spawned by the advent of the social web.   Although it’s not clear why Twitter is winning this game I think it’s almost clear that they will be the big winner, and since they are sharing the wealth so generously I don’t see how anybody is likely to unseat them.   Facebook and Myspace can continue to thrive as private social tools and Google can thrive as the search of choice.  Ebay will remain the main US auction space for some time.   This still leaves a massive market in which Twitter can continue to provide the key standards and infrastructure for the global conversation.

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Jason Calacanis is no stranger to successful internet companies and even though he has no direct financial connection to Twitter (to my knowledge), he’s very bullish on Twitter’s prospects to make a *lot* of money as Twitter traffic and growth explode online.

Jason is right to tell people to ignore today’s Wall Street Journal article suggesting Twitter’s lack of revenue is a sign of weakness. Almost to the contrary Twitter is correctly building a loyal following of Twitter “Friends and Followers”, many of whom would not participate if the commercial elements were too overwhelming. Google did this masterfully with search with a lean, user friendly interface. After people became loyal and even addicted to Google search they turned on the revenue spigots and Google became the key online player within just a few years.

Calacanis is noting how simply “turning on” various possible advertising features at Twitter would instantly lead to millions in revenue – he said “hundreds of millions” but one should be skeptical of that level of optimism given the challenges Facebook has had despite their huge level of traffic and participation.

Calacanis is so optimistic about Twitter he’s convinced it will be worth more than Facebook eventually, and feels that it’s now worth about a billion based on the implied valuations of the venture capital.

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From the official Twitter 140 Conference Schedule

Alex Payne Keynote: The Business Value of the Twitter API

Scores of businesses are utilizing the rich and dynamic data set provided by The Twitter API in ways that improve customer experience, enhance product development, increase visibility, and provide bottom-line profits. In his keynote, Alex Payne will provide several real-world examples of how the Twitter API is delivering results for organizations large and small.

Best Practices Panel: I am a Twitter God(dess) and So Can You
Panelists: iJustine, Tara Hunt, Dave Peck Moderator: Steve Broback

The Twitterati are masters at gaining followers, driving conversation, and assimilating the tsunami of commentary and links that stream to them on a daily basis. In this session, our panel of experts will discuss what strategies, tactics, and tools have taken them to the top of the twitosphere.

Writing Tweets that get attention and retweeted * Services and utilities you can’t live without * Smart followership — knowing who (and how many) to follow * The best devices and software for mobile posting * Timing your Tweets

What Makes a Great Twitter App?
Panelists: Loren Brichter, Britt Selvitelle, Dom Sagolla, Moderator: Sudha Jamthe

At the core of Twitter’s popularity is it’s utter simplicity. Building on top of that functionality while retaining the ease of use and visual appeal of Twitter itself is no easy task. This panel, including both external developers and one of Twitter’s own user experience players, will talk about the design and functionality choices they made, how they worked with the API to streamline them, and how you can apply these concepts to your own applications.

Purpose-driven user interface design * Managing system resources * The limitations of mobile devices * Working with the 100-call hourly API limit

How Twitter Will Make A Billion, and How You Can Make a Million
Jason Calacanis

Jason Calacanis has a proven track record for spotting and embracing winning Web technologies — and profiting from them. As the founder of Weblogs Inc, (launched in 2003) he was among the first to make millions from blogging as a business. Marrying “community” with search may be all the rage in 2009, but Jason had a business plan for that (Mahalo) back in 2006. That’s also the year he started Tweeting.

In this lively (and debate-provoking) keynote Jason will detail from an outsider’s perspective how the Twitter platform will be monetized by its founders, and how publishers, marketers, and developers can make their own fortunes from the service.

Twitter Strategies: Real-World Success Stories
Panelists: Jeff Pester, Bryan Rhoads, Warren Whitlock, Justin Kan

Signing up for Twitter is simple, but using it effectively as a business tool can be complex. How do you turn a service that lets you share messages in 140-character bursts into a valuable business asset? We’ve assembled a team of business innovators who are doing just that. Learn how you can use the same strategies they’re using to grow your audience, your influence, and your bottom line.

Supporting customers while courting shoppers * Contributing vs. messaging * Timing your tweets * Bringing value to the conversation * Gestures that bring positive responses * Essential tools and services

Visualizing Twitter
Panelists: Damon Cortesi, Jeff Katz, Dan Zarella Moderator: Steve Broback

With tens of millions of tweets generated daily, the data Twitter generates can be overwhelming. To capture true meaning, filtering and visualization are essential. Luckily, many innovative and powerful tools and techniques exist to turn text and numbers into pixels, vectors, and movement.

In this session, our panel of experts will share some of their favorite visualizations along with the code and service architectures that drive them.

Fast and easy online services * Code templates * Flash vs Javascript vs Silverlight * Techniques for interactivity

Twitter Goes Mainstream: What are the Issues and How Will They Be Resolved?
Panelists: Jennifer Leggio, Jonathan Matkowsky, Richard Brewer-Hay

No technology or platform can go from zero to 12 million users in three years without experiencing a myriad of challenges, and Twitter is no exception. This session will examine some of the pressing concerns facing Twitter, their users, and the developer community. We’ll drill down on what aspects of these issues most affect those in the commercial arena, while debating potential solutions.

Security and authorization * Name squatting * Scaling concerns * Pay per tweet and spam * Buying followers * What happens if Twitter gets acquired? * SEC concerns: will it take the soul out of tweeting? * Oprah and Ashton: the beginning of the end?

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Like it or not, Twitter’s spectacular and explosive growth is unprecedented and in my opinion may herald something of a new era in broad based social media participation.     Unlike Myspace and Facebook, Twitter appears to be popular pretty much across the entire US demographic landscape and is making significant inroads into foreign markets.    Perhaps most significantly Twitter is doing this pretty much by word of mouth and huge free exposure on network news and celebrity TV.   Twitter is growing rapidly without spending more than a trivial amount (if any) on marketing.

TechCrunch is citing Compete.com statistics showing 19 million vistors to Twitter last mont, up some 95% … per month.    At that growth rate the service could surpass *all other applications* within a year.    The recent increase was fueled by a celebrity onslaught of Oprah’s Twitter debut and the hugely popular Ashton Kutcher vs CNN Twitter duel and this is unlikely to repeat every month, but even at last year’s growth rate of very roughly 1000% Twitter will be very huge very soon.     Facebook and Google continue to remain very solidly in control of much of the online landscape with hundreds of millions using those services but it’s now very clear that Twitter is in the social media game in a big way.

With a simple and intuitive interface, a 140 character limit on comment size, ten second sign up, celebrities, and superficial content, it’s easy to see why this service is popular among mainstream users as well as businesses who want to be able to push out content to “followers” quickly and easily.

TechCrunch has a good report here

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Via this Forbes article we hear from Joshua Michel-Ross at Oreilly Media that the internet is transforming social activity into what he calls “The Rise of the Social Nervous System”.     It’s a provocative concept that is appearing more and more in the technical and sociological literature.   Although clearly part of the comparison of the collective mental activity to a “hive mind” stems from Science Fiction such as the Borg in Star Trek, it’s also true that human social relationships are of profound importance to the species.   Online social networking has clearly reached a high enough level of use and social interactivity that “virtual socializing” is poised to eclipse “real socializing” in terms of how many hours we spend with each in a day.   Although I’m sure on average we still spend more “real time” than “virtual time” with friends and family, I’d predict this will change within a decade or so, in part as passive TV viewing habits shift  to more interactive online social activities.

As I noted over at my personal blog, Twitter is very important as its simple intervace and explosive growth bring millions of mainstream users into the social media maelstrom.    It’s certainly not clear when all this socializing is going to take humanity, but I’d argue it’s already clear that human relationships are undergoing one of the most significant transformations since the rise of the types of social interactions that came about as cities began to replace rural living, and associating with others of like interests became more important than associating with your neighbors.    On balance these changes are not necessarily good, but I think they are inevitable as people tend to flock most easily to those of like mind who share the same general sensibilities about the world.   Ironically the very technologies that are theoretically connecting us to billions of others may also serve in part to advance our tendency to practice “group think” and only associate with the niches that suit us.   On the optimistic side we may find that the global  social network and ubiquitous interactivity will – for the first time in history – present us with opportunities to collectively solve problems we could not possible solve alone.    As with most technologies it’s up to us how we choose to use the power, so let’s use it wisely.

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