Twitter Inc. Gets a Shot at More People via Facebook's Internet.org

By Markets Fool.com

After coming under fire for disregarding net neutrality with Internet.org, Mark Zuckerberg earlier this month announced that Facebook will open Internet.org to other developers. Internet.org provides free, albeit limited, Internet access in markets of low connectivity. Most recently, Facebook brought its service to India and Colombia.

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Facebook partners with local telecom companies to provide free Internet service for smartphone users. As such, Facebook outlined some guidelines for developers in order to receive approval and placement on the Internet.org platform. Developers can't include high-resolution photos or video or other bandwidth-intensive media. They can't use JavaScript, and they can't use SSL/TSL/HTTPS security.

Interestingly, none of these would completely preclude Twitter , which competes with Facebook for attention and ad spend, from developing a stripped-down version of its app for Internet.org. The question is, will Facebook let it?


Internet.org launched in India earlier this year. Source: Facebook.

Internet beats SMS
Twitter started as a service used via SMS (short message service), and some users still use the service exclusively by sending and receiving text messages. In developing markets, where Facebook is prioritizing the launch of Internet.org, Twitter is still working to sign up new users via SMS.

Earlier this year, Twitter purchased ZipDial, a company that specializes in missed calls across India and other developing markets. You call a specific number, and hang up before the call is connected. ZipDial registers the missed call and can then send you a text message at the number you called from. Twitter is using ZipDial to promote popular Twitter accounts and get people to follow them via ZipDial.

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All of this costs users nothing, because the call never connects, and most carriers only charge to send texts -- not receive them. But if Twitter could develop a stripped-down app for Internet.org, it wouldn't have to pay for all of those text messages it's sending in countries like India and Colombia.

At the end of its first quarter, Twitter reported 6 million users that signed up and use Twitter exclusively via SMS. While it believes it can effectively monetize these users through things like promoted accounts, it admits they are less valuable than users on the web or smartphones. Getting users on the web, even if it's a bare-bones version of it, makes these users much more valuable.

Meanwhile, Twitter's total user growth has come under scrutiny over the last year or so, and it's slowed down significantly. Last quarter, active users grew by 14 million sequentially, just 18% year over year. Comparatively, Facebook added about 50 million new active users last quarter, and it had 1.39 billion of them at the end of last year. Getting onto Internet.org would open Twitter to a mass of potential users.

Giving up control
Opening Internet.org requires Facebook to give up its control over what apps are allowed in and which ones aren't. If Twitter abides by all of the restrictions set forth by Facebook, it'll have no choice but to let it on the platform. Carriers might stop Twitter if it uses too much data in their estimates, but Facebook won't be able to do anything without being lambasted by net neutrality wonks.

However, Twitter will have to surrender data on its users to Facebook, carriers, and local governments if it wants to use the platform to sign up new users and deliver tweets. It also won't be able to guarantee the security of its users' information since Facebook won't allow SSL or HTTPS. Still, these issues are more pertinent to individuals with privacy concerns, and they apply to all individual data from apps on Internet.org.

While Twitter's data may help Facebook target its ads slightly better, Twitter ought to think it's worthwhile to sign up users who would otherwise be less valuable on SMS, or who wouldn't have signed up at all. And while Facebook competes with Twitter for ad spend, the advertising market in most developing markets is growing fast enough to support both social networks and then some.

The article Twitter Inc. Gets a Shot at More People via Facebook's Internet.org originally appeared on Fool.com.

Adam Levy owns shares of Apple. The Motley Fool recommends Apple, Facebook, and Twitter. The Motley Fool owns shares of Apple, Facebook, and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.