Not all Twitter developers happy chirpers

Just two months ago, investors and entrepreneurs lauded the microblogging platform Twitter as open and developer friendly.

At least, it used to be. Now, even the most optimistic developers and their venture backers have reason to be more cautious about relying too heavily on the Twitter platform, which has more than 100 million users and is registering 300,000 new users every day, according to the company.

At Chirp, Twitter’s first developer’s conference held in San Francisco last week, CEO Evan Williams announced a new geotagging feature called Points of Interest that will allow Twitter users to click on a place name, then view a real-time stream of tweets also deriving from that particular place.

Williams asserted that the feature isn’t meant to “duplicate the functionality” of location-based social media startups, such as VC-backed startups Foursquare and Gowalla. Yet it could conceivably become a threat to both. (Foursquare raised $1.35 million last fall from Union Square Ventures, O’Reilly Alpha Tech Ventures, Ron Conway and others while Gowalla has raised $10.4 million from The Founders Fund and Alsop-Louie Partners.)

Earlier in the week, Twitter also announced a new advertising program called Promoted Tweets that will show up when Twitter users search for keywords that advertisers have purchased. The services are reminiscent of TweetUp, which was recently co-founded by entrepreneur Bill Gross of Idealab, and which has raised $3.5 million from Index Ventures, Revolution and individual investors.

“We feel Twitter is unbelievably powerful, but finding the thoughtful tweets amid all the noise is unbelievably hard,” Gross told the New York Times just hours before Twitter’s announcement. “What we’re bringing is a new sort-order to tweets.”

At the conference, Williams tried to assuage developers, telling them that “Twitter has always been about developers…you’ve helped define it, poured in your time and energy all the while putting up with our growing pains. And for that, we thank you.”

Williams later said in his keynote address that “there’s a fundamental philosophy that’s not changing with Twitter. We’ve always believed in openness. We believe in an open system and the power of ideas. And that is not changing. Twitter is truly collaboration and that is not changing.”

Williams has plenty of supporters, too. Asked about his reaction to Points of Interest, Foursquare founder Dennis Crowley was unconcerned, telling the online outlet Business Insider: “We’ve been talking with [Twitter] and working with them on ways we can both make better use of the overlap of the focus on location.”

Meanwhile, angel investor Chris Sacca, an early Twitter backer, tells PE Week that the notion that Twitter is putting companies out of business is not true.

“The ecosystem of developers have the lead right now,” says Sacca, who has also invested in third-party startups bit.ly, Posterous and PollEverywhere. “[Many third-party developers] have innovated faster than Twitter and they will continue to do so. They are smaller and nimbler and have the freedom to take more chances.”

Just last week, Ryan Sarver, Twitter’s director of platform told Chirp attendees that three-fourths of Twitter’s traffic and 60% of all tweets come from third-party clients. He also noted that Twitter has registered more than 50,000 applications in the last year alone, bringing the total of registered applications to more than 100,000.

However, angel investor Travis Kalanick says he hasn’t backed a company that is highly dependent on Twitter for its success and has no plans to.

“Any startup that tries to insert itself into Twitter’s monetization stream, whether it’s ads or analytics, should assume that they either get acquired by Twitter or will be competing with them,” says Kalanick, who over the last year has invested $1 million in 10 startups, including Blippy, the social network that invites users to share their credit card transactions; FormSpring, a fast-growing social question-and-answer site; and Expensify, a startup aimed at simplifying the expense reporting process.

Kalanick notes that Twitter gets so many requests for its application programming interface (a set of routines, protocols, and tools for building related software applications) that only investors that are involved in Twitter itself will have any kind of sway with the company or any chance of getting acquired.

Angel investor Sacca dismisses the notion that only those in Twitter’s network will have a shot of getting acquired by the company.

“Corporate development at Twitter is not about relationships,” says Sacca. “It’s about merit. It comes down to who builds great products. The marketplace sorts that out and the users vote with their use.”

Sacca adds: “I feel lucky to have had that privilege [of funding Twitter]. But it definitely hasn’t earned me any special access. To date I have sold exactly zero companies to Twitter.”