My biggest takeaway from Chirp was how ambitious the Twitter team is. For a company that has long been under critics’ fire for not having a business model, the core of its strategy remains surprisingly attached to “getting the product right” first. The company’s priorities, according to CEO Ev Williams, is “0. Infrastructure; 1. Friction-free; 2. Relevance; 3. Revenue.” Revenue was decidedly last on the list.

Infrastructure is easy to understand – Twitter has been hurt by scaling pains so many times that it makes sense that the company is focused on coping with the growth first and foremost. Friction-free is about making the service easier to use, especially in the context of retaining new users, which was Ev’s rationale for the Tweetie acquisition. Friction-free is also the thinking behind the @anywhere initiative – so that users can use Twitter anywhere on the web, and not be interrupted by having to open another web-page etc. Relevance is partly about search, and partly about new features such as location and annotations.

And this is where things start to get interesting. For a long time, Twitter itself did not have an inbuilt search function; a number of 3rd party developers offered competing Twitter search products. The leader of these products, Summize, was eventually acquired by Twitter; but as Ev described it at Chirp, it was more like a merge of equals (size of team etc.). While the Twitter team didn’t talk a lot about search, I felt the key to the service’s relevance, and future business model, would be search – how do you organize this world of information (to paraphrase Google’s mission) stored in the billions of tweets, so that value can be extracted?

This is by no means an easy task. The distinctiveness about Twitter is its timeliness – you can literally find out what’s going in the world right now. However, this also makes search, or any other type of data organization, technically complex. Annotations and other types of meta-data helps reduce the complexity, as well as efforts to understand the users’ intent – are you looking for info on a specific location or event – but it will still be a daunting problem. (Google and Bing has had access to Twitter’s data-stream for a while now, but whether it’s for lack of trying or the complexity of the issue, their current use of Twitter data in their search results seem largely inconsequential.)

Still, if the Twitter team can crack this nut, then they may have on their hands a truly blockbuster product. The beauty of Twitter is how many different usages people have come up with for it – as a communications tool, it is simply an enabler of numerous services. If they can make their information much more organized through search, then the value of the communication tool is enhanced, as well as the services built on top of it. The recent story of how Twitter can be used to predict box office success is just one example of the potential value.

(This post was written over several days so the thought-flow is somewhat broken.)

When I was interviewing for my summer internship, I got asked the question “if you had funding to build a new search engine, what would you do?” My response was you can either tackle the existing search problem through a drastically different algorithm, or focus on specific verticals (e.g. travel) or new markets (mobile, location). If we change the phrase “search engine” to “method of organizing information”, then certainly both Twitter and Facebook are taking on a differentiated approach from Google. While the three companies may at face value be in very discrete markets, they are on a unavoidable collision course in terms of competition. While Google is all about indexing the static web, Facebook and Twitter are built on the social web, and they may well grow to become the Google killer that many have been searching for.

This is not as far-stretched as you may think. Think about the last time you performed a search. Did you ask any friends first? Was it only when they said “I don’t know” that you replied, “don’t worry about it. I’ll just Google it.”? Google search is powerful and hugely useful, but only to the extent of how useful the static pages it indexes are. When you do a search on a specific question, you often have to tinker it a few times. Click on a few different search results. Read through them. Often the pages won’t have the answer to the exact question you have, but enough info to give you pieces of the puzzle so you can piece it together. This is still much, much more efficient compared to doing research at the library, but the power of the social web is that you are not confined to static pages and information – the odds are that there is some person out there who knows exactly the answer to your question, and the power of the social web is that it enables you to ask that person directly. Quite a few of the people I follow on Twitter use it as a magical search engine – you pose a question on Twitter and your followers answer it.

Of course, this is just one specific scenario where social web services such as Twitter and Facebook have the upper hand against Google (and for the many, many instances where you need static information Google is still the better option – e.g. what is the year that the US was founded); but it does highlight Google’s key vulnerability – its lack of presence in social. Be it Orkut, Wave or Buzz, Google has repeatedly shown its inability to come up with a competitive social networking product. Maybe Google simply doesn’t have the social genes in its DNA – which is fine, as for the foreseeable future they will still make a killing in Adwords/Adsense. But the danger for Google is that search gets demoted from a primary instinct into a secondary instinct, the same way that Kayak / Mobissimo / Bing Travel and other vertical search engines have made Google irrelevant in travel search. It will still be a huge market, but only a less efficient/user-friendly alternative. And it’s clear from Facebook this week and Twitter last week that these companies have huge ambitions too in organizing the world’s information – hence the competition will be inevitable.

One last note – while Facebook has seemed to garner much more attention and praise with its announcements, Twitter’s efforts, especially in mobile shouldn’t be disregarded. The news today that Twitter has acquired SMS service Cloudhopper may sound insignificant to those of us who are used to iPhone apps and 3G networks, but in the grand scheme of things SMS is still such a viable and active method of information delivery. It will be interesting to see how Twitter uses SMS to its advantage.

ReadWriteWeb hosted a very interesting panel today, live-streamed on the net. The panelists were famous Chinese activist Ai Weiwei (follow his Twitter feed @aiww for a constant stream of challenges to the Chinese government on various issues), Twitter co-founder Jack Dorsey, and ReadWriteWeb founder Richard MacManus.

The discussion was themed around the role of social media (and especially Twitter) in political activism. I felt the discussion hovered around basic questions, such as Ai Weiwei explaining the basic differences in tweeting in English and Chinese, and asking Jack Dorsey “when will you roll out a Chinese language version of Twitter?” To which Dorsey said it was a matter of time – an answer that Ai said he was not happy with.

Some interesting moments / quotes from the panelists:

• Dorsey: At one point he somewhat surprisingly admitted that he had only learned 3 weeks ago that Twitter was being blocked in China.
• Dorsey: He also confessed that he has no knowledge of how to technically overcome the Great Fire Wall, which must have been disappointing to some users who had hoped Twitter engineering would directly tackle censorship in regions like Iran and China.

• Ai: He commented that the panel with Dorsey was like a “blind date”, since he didn’t know what to expect.
• Ai: Admitted that he is on Twitter 8 hours a day, and he gets most of his news through the service.
• Au: During the Q&A he stated that “If we had Twitter earlier, history would be rewritten, and I would be much more famous than my father [note: his father is a famous Chinese poet].”

• One Chinese American lady during the Q&A took an apologist role for the Chinese government and said it should be given more time to lift China out of poverty before tackling democracy. Ai later asked her name and what her venture was in China (a PE firm). Chinese human flesh search engine in action!

Ai Weiwei was at the center of much of the discussion with quite a lot of the Q&A addressing “sensitive topics” such as human rights and China’s one-party rule. In addition, Google Inc.(NASDAQ: GOOG) was also frequently discussed with respect to the ongoing Google-China content filtering spat.

On the whole, I thought the Q&A was much more interesting than the main panel itself, but the discussion lacked depth, partly due to the wide range of topics that could be discussed, and partly due to issues with language / cultural context. Still, it’s a great publicity event for Ai, and if more people become aware of these activists’ efforts, it’s no doubt a good development for the Chinese web.

You can watch the complete video of the panel and Q&A below:

What I want to talk about, and this is totally going off on a tangent here, is what Twitter’s valuation means to China. When I started this blog I had wanted to stay away from politics; but today I will make an exception because I do see it as a revelation (at least personally).

A few questions to cover here. First, does Twitter create real economic value? The $1B valuation, however over-blown it may be, seems to suggest so, despite the fact that Twitter has no business model (yet). And of course, looking at the fundamentals, Twitter is essentially a service that offers a more efficient way for web-users to consume certain kinds of information – for example, real-time info on current events, and articles that are deemed to be worth reading. It’s a development in how information on the web is organized. Thus, even though users are not willing to pay for the service, there is real economic value being generated (consumer surplus).

Secondly, why then, is a tool that creates real economic value blocked in China (side note, Twitpic was blocked today)? And not just Twitter, but most of its Chinese web clones. The direct and obvious reason is that these tools create headaches for the censorship program of the government. They could be used to cause social movements, as was effectively demonstrated in Iran. But by shutting down these tools for the sake of social stability (in the short-term), the regime also creates a deadweight loss (sorry for all the econ jargon… I’ve been studying hard) – or, in other words, productivity of society at large is held back.

Going back to my high school history and politics classes, the Marxist view to social development is that once the political system does not fit the needs of productivity, the political system will have to be changed (evolution or revolution). Slavery was the best way of organizing production, once upon a time. Then it was feudalism. Then capitalism. Or, using a business school analogy, if a company’s business model doesn’t fit the market, that company either adapts or go out of business.

I feel this is where China’s regime is at. We’ve had 30 years of rapid development where the political system was mostly left untouched. Now it is getting closer to the point where it will have to change, or development will be held back. The fact that value-creating tools like Twitter are forbidden is simply sign that change has to come. I can envision at some point in future society at large will force the change, simply because otherwise the economy cannot grow. So today I’m especially optimistic about that change, even if it’s just ironically due to the Marxist view to the world.

(Apologies this is not really a tech post… But I did feel excited about this train of thought.)

In China, the micro-blogging scene is very different. Whereas in the US a winner-takes-all scenario has more-or-less already happened (as long as Twitter is scaling up rapidly enough to meet the demand), in China the space is severely under-developed. The single biggest reason to this is government censorship. Since July, most of the leading Twitter-clones in China (Fanfou, Digu etc.) have been ordered to close shop, due to government fears that rioters in Xinjiang will use these tools to communicate (Facebook was also banned in China around that time). As of now, Zuosa is one of the remaining twitter-clones still in operation, and it is walking a very fine line. One of the co-founders of Zuosa is Alex Mou, whose Twitter account is Aleksoft. His twitter stream is mostly retweets of saucy tweets on Zuosa (links to hot girls’ pics, for example, the type of borderline porn stuff that passes as “social news” on all major Chinese portals to attract traffic).

Another development in recent months is the entrance of big Chinese portals into this space. Sina’s offering, unimaginatively named “Sina micro-blogging” (literal translation), is currently invite only. From people who have signed up to the service, the discussions are heavily self-censored by Sina, and accounts seem to have been deleted due to sensitive political comments. My feeling is that Sina is walking a fine line here – at invite-only stage, the service is being well controlled in terms of scale, making it less of a nuisance for government watchdogs. And the self-censoring certainly helps keep it under the radar. But that also destroys the service’s value – since this is akin to a self-selection process of content, at the end of which only saucy gossip will remain (since high-value users will have migrated elsewhere).

Which brings us back to Twitter. Despite being blocked by the GFW, tech-savvy Chinese are still accessing and actively using the service. This is also a self-selection process – now the only Chinese bloggers on Twitter seem to be the politically charged activists / dissidents, and a big part of their discussion is about the sensitive stuff. Take Ai Weiwei (Twitter id: aiww) for example. Ai is a famous artist / architect in China, perhaps most famously known for his work on the “Bird’s Nest”, the Olympic Stadium in Beijing. He is also a famously outspoken activist, and his twitter stream is a constant rant against the system in China. And Chinese internet users have devised many ways to go around the GFW block, the result of which, I feel, that has consolidated Twitter’s leadership in Chinese micro-blogging – if this indeed turns out to be the case, then Twitter would join the ranks of a small list of international websites that have taken off in China (whereas Amazon, eBay, Facebook, Myspace, Yahoo etc. have all failed to make a dent in the local market), ironically due to the government’s killing of its major local competitors. But it will also mean that micro-blogging will still have a long way to go before becoming truly mainstream in China.

The Chinese web-space is craving for micro-blogging services, thanks to the artificial control on supply. This is why I have seen very healthy interest in the new Yahoo Meme from Chinese users on Twitter. So, somewhat perversely, the Chinese micro-blogging landscape remains a white-space (albeit a highly volatile one) for players to compete.