Twistory 101: It’s All About Small Business

The world's abuzz this week with word that Twitter is getting serious about business – the proof point being Twitter's new subdomain "" and the "Twitter 101" handbook currently living there, a white paper of sorts aimed at helping companies figure out how to leverage the sometimes befuddling service. This…

biztweetbird.pngThe world’s abuzz this week with word that Twitter is getting serious about business – the proof point being Twitter’s new subdomain “” and the “Twitter 101” handbook currently living there, a white paper of sorts aimed at helping companies figure out how to leverage the sometimes befuddling service.

This all reminds me of Fall 2004. Back then, Google was coming on hard in search. And while the world viewed Google as an upstart stealing query share from the incumbent Yahoo, the real drama was happening on the business side. By the Fall of 2004, Google’s AdWord and AdSense solutions were warranting serious attention from the same ecosystem of SEO/SEM that previously had focused on Overture’s offerings.

In this Fall, 2004 thread on Webmasterworld, where SEO types hang out to talk shop, search marketers debate the relative performance and profitability of Overture compared with Google. Prior to that year, Overture was the undisputed king of paid traffic. But in ’04, Google started pulling ahead, and since that time, it’s never looked back. Why?

Well, there are myriad reasons: Google had a better consumer facing search experience than Yahoo (Yahoo bought Overture in 2003), and Google’s AdWord service including a quality ranking score (as well as paid ranking like Overture), for example. But I believe something else was at work, an upward spiral of adoption by small business advertisers.

What do I mean by that?

Well, I was covering the search space pretty closely back then, and one of the metrics touted by both Google and Yahoo were the number of advertisers who were using their service. Google didn’t publicly announce those numbers, but my sources inside the company did whisper them to me from time to time. Overture, on the other hand, touted their “active advertiser” numbers in their public filings. Its number of active, paying advertisers crossed 100,000 around the time of the Yahoo acquisition, and upwards of 200,000 a year later. Who were all those advertisers? That early in the search revolution, they sure weren’t the Fortune 500, or even the Fortune 5000. They were SMBs – the lifeblood of the US economy, responsible for two thirds of jobs and the driving force of a nascent recovery from the 2001-03 recession. These businesses live on the edge of profit at all times, and they are always the first to find tools that might help them succeed. By ’04, tens of thousands of them had found paid search.

As far as I could tell, Yahoo stopped disclosing the figure after the acquisition closed. And as I was strolling the halls of the first Web2 conference (October 2004), I got a phone call that might explain why. The call was from a source at Google, who wanted me to know that Google had eclipsed Overture in the number of total active advertisers. I couldn’t confirm that number, nor could I get Overture/Yahoo to respond, so I dropped the story (can you imagine a blogger in the tech world not printing a story like that now? How times change.).

twit101.pngAnyway, I was reminded of this anecdote while reading through “Twitter 101” and it occurs to me that to really succeed, Twitter must be useful, really useful, to small businesses. It was those tens of thousands of small businesses who drove success at Overture, and then at Google. Search became an essential channel for lead generation, and Google became the dominant player in that channel.  

Billions ensued.

While a lot of the attention around business success on Twitter focuses on big brands like Comcast, JetBlue, or WholeFoods, the ecosystem that will really drive value, revenue, and profit for a TweetSense like execution will be the small business ecosystem. And absent a clear service like AdWords for Twitter, a user manual of sorts that explains why Twitter can help business makes an awful lot of … tweetsense.

11 thoughts on “Twistory 101: It’s All About Small Business”

  1. Bravo! John. You may take the rest of the day off and finish that tree house. FYI there is one national company out of Minnesota that is currently doing a phenomenal job with Twitter – converting much of its retail staff to the status of interactive “brand ambassadors”. You have likely by now seen the highly engaging commercials for Best Buy – and from what I see on Twitter, they are working.

  2. I couldn’t agree more. A few weeks ago, in my post “I Have Seen the Future of Local Media” (, I warned Yellow Pages publishers that real-time activity streams and real-time search represented a new shift in user paradigm. This is either an amazing opportunity for them(or a threat if they don’t embrace it!), the same way Google came along in 2000-2002 and blindsided them with simple user experience and great roi-driven local ads.

    As I wrote a few weeks ago, “With Facebook and Twitter, we’re clearly seeing the emergence of new ”marketplaces”, where people and companies/brands meet to discuss, to share links (including news) but also to “buy” and “sell”. To the foreign eye, they’re noisy, unruly and useless but I think they are a modern version of souqs. According to Wikipedia, “souqs were more than just a market to buy and sell goods; they were also major festivals and many cultural and social activities took place in them”.

    Sounds familiar?

  3. Solid analysis John. Given the importance of SMBs, I’m surprised you didn’t include Facebook in the discussion. It appears that they have a substantial head start in the market and many SMBs are finding great returns on their Social Ad spend.

    Do you see Facebook and Twitter fighting for the same SMB customers in the end? Are there segments of the SMB market that will find more success on FB, and others on Twitter?

  4. Sebastien, Twitter presents a similar threat to the Yellow Pages publishers that social review sites such as Yelp did when they emerged a few years ago. The thing is I actually think sites like Yelp have just as much to lose because of Twitter.

    If Twitter can become the de facto place where conversations take place – between SMB customers, between SMBs and their customers and between SMBs – then they have pretty much usurped the space that Yelp has staked out. All they have to do is figure out how to match those conversations to a business record, easily licensed from Localeze, InfoUSA, etc., and they have the makings of a pretty amazing IYP. Then they syndicate those conversations out to all of the other IYPs who rely on search for most of their traffic and they really start to take over in a Google-like fashion.

  5. gotta love all the smart ad experts talking about TweetSense-like systems for small businesses. Can someone tell me what that means? What kind of system? Is it keyword targeted? If so, how does Twitter avoid the Overture/Yahoo patent that they sued Google with? John always likes to blow hard but never likes to come up with solutions. I dare him to try.

  6. Very much enjoy your ongoing posts on Twitter’s evolution. This one is spot on. Twitter’s launch of Twitter 101 for Business this past week coupled with news of a new interface to “better show who we are” point to Twitter seeing a big opportunity in the SMB space. And we all know how Google profited by this focus!

    SMB’s are really paying attention to what social media can do. Just was at the local pool Saturday with friend and local restaurant owner of Jack N Dyl’s in Tarrytown, NY who is figuring out all they can be doing using Twitter as well as Facebook to promote business.

  7. There’s no argument here. Social Networking is one of the most important ways to get the word out about you and what you’re doing…
    A lot of people ask, “who cares?” but well, just like a lot of us became curious about how Google works, Twitter is fast evolving into an online marketing tool! Thanks for the great post!

  8. Nail on the head with SMBs being one of the key’s to Overture’s downfall in UK. Self service nature of adwords certainly suited SMBs much better than the old Overture system (editorial approval for every listing!!!!) When I left Overture had something like 25k accounts in the UK versus 100k for Google.

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