This morning I loaded up Twitter.com and received an error message telling me that the site was not responding. Not the good way to start the day for a billion dollar company. How did I come up with the company being worth $1 billion? I didn’t, my friend Nate Westheimer did. Nate wrote a piece suggesting that a mobile payment system would be Twitter’s ticket to becoming a billion dollar company in a short period of time.

Not a bad idea to be honest, and it is similar to the idea that Facebook has, which is preparing to launch a payment system for their platform. Want to send your friend $5 real quick for the beers they bought you last night? No problem, just text “p biznickman $5″. I hadn’t thought of this solution for Twitter previously, but this makes a lot of sense.

Micropayments are currently an area of rising importance. While I may not text my friends $0.50, I could easily see an API tying into Twitter to transfer small payments for a virtual gift or obtaining access to a premium blog post. While the concept is still foreign to many people, a text based way for transferring small amounts of money makes a ton of sense.

While Twitter doesn’t have a massive amount of market penetration, the site has become ubiquitous among early adopters and making the leap to the mainstream is not far away. So how will Twitter end up making money (if they can keep their site up)? Text based payments if they follow Nate’s advice. Do you agree that a Twitter based payment system would make a lot of sense?

Last night I was reading a post by Jason Preston about how his Twitter usage has declined drastically since the service hasn’t been working. I had noticed the same thing and after checking my details over at TweetStats it appears that my assumptions were confirmed.

If you take a look at other users on Twitter you will find a similar trend. While the top users may have throttled their Twitter usage due to Twitter downtime and general service interruptions, it appears that the site continues to attract new users. A look at Twitter’s Alexa chart confirms this. Whether or not their service is attracting new users, they seriously need to get things under control.

With yesterday’s news that the company has raised additional funding, there will soon be no excuses for the substantial amount of downtime. While I’ve decided to move elsewhere for my conversation for the most part and may not be the only one, not everybody is running for the exits. The people I’m following still appear to be active.

Unfortunately though I can rarely check my Twitter while on the go because the Twitter app on my Blackberry is now pretty much rendered useless thanks to Twitter’s limits on API calls. So where are your conversations going on? Are you still using Twitter or have you moved to other services like Plurk and FriendFeed?

My Twitter Usage

Twitter has announced the new investors that they have accepted funding from: Bijan Sabet of Spark Capital and Jeff Bezos of Bezos Expeditions (as well as CEO of Amazon). How much have they raised exactly? They haven’t said but Om Malik previously speculated that the amount was $15 million.

In their announcement blog post, Biz Stone suggests that they will soon have a sustainable business model for the company. No company has been able to figure out a way to monetize microblogging so far but apparently there is something in the works. With Jeff Bezos as an investor I’d imagine Amazon S3 ad EC2 handling some of the scaling issues for the company.

That’s one of the primary reasons Bezos invested in Animoto, a company which today announced they have now expanded their service offerings for businesses. It will be interesting to see if this team can pull off the impossible before everyone runs off to Plurk. Ok, maybe that won’t happen but the company definitely has a challenging road ahead. Congratulations to the Twitter team and good luck on building a more powerful product!

I gotta be honest. For the past couple weeks I’ve been using Plurk a ton. The initial reason was downtime from Twitter but it increasingly became about the much more active community. Then today I read about developers bailing on Twitter because of their unreliable API. That’s a big problem but then again not even Plurk has a functioning API.

The reality is that developing a micro-blogging platform is a lot more difficult then anyone anticipated as far as I can tell. Twitter has throttled API access, making it extremely difficult for any developer to build a reliable application on top of the service. A couple months ago, I launched an internal directory for this site but the Twitter API slowed down the service significantly.

While I’ve since figured out a workaround (which has yet to be implemented), having to develop a workaround due to an unreliable API just doesn’t seem like the right solution. Some seem to think that Twitter is going to die thanks to their failing API. While I’ve been using the service less frequently, many of my contacts are still using the service regularly to stay updated with what’s going on in the digital community.

Many more are confused with which service to use and have instead decided to use all of them by taking advantage of the Ping.fm service which updates your status across all your networks. Whatever the solution is, something has to give in the world of status updates and micro-blogging in general. For some reason I seriously doubt that this will mean the death of Twitter. Have you started using other services as well or are you still a faithful Twitter user?

Year after year, Twitter has gone down on the day of Apple’s Worldwide Developer Conference (WWDC). Well, at least for the past two years that the site has been around during the Apple conference. It happens to be one of the most buzzed about events in the industry. Considering the buzz surrounding the expected iPhone announcement this afternoon, we can expect Twitter to go into overload as usual.

As such, the company has posted that they are prepared for the event, taking the proper precautions including an increase in their memcache usage and the addition of more read-slave servers. I’m not sure if accessing Twitter was the problem or if updates were the biggest issue but the company believes that they are now prepared for an onslaught of site requests.

Twitter consistently has downtime and as such many users have begun switching to competing services. I for one have found myself using Plurk with increasing frequency. The real question is if their preparations are going to stop people from moving to other services at this point. Can Twitter have days of downtime and be up for one day and expect the users to suddenly be satisfied?

Over the past few weeks there has been a pretty consistent trend of conversation in the blogosphere surrounding site downtime. One meme that frequently reoccurs is that “Twitter is Down.” Just last night Mike Arrington posted an error message from Twitter which said “We just lost a database about 5 minutes ago and this has severely impacted the site.” That doesn’t sound like to big of an error, right?

This morning when I woke up, the first site I checked out was Plurk. I might be a Plurk addict now but when I loaded the site, it wasn’t functioning properly. I couldn’t update my status and eventually I was prompted with the following error:

I was a little shocked that only 2 days after I started using the service, it was already having scaling issues. Twitter regularly has issues and back when MySpace became popular it was also down every few hours. If you provide a free and useful service, I’m beginning to think that reliability is not as important. While people become frustrated, with not having access to a site, they will still come back later and try again.

According to Compete.com, Twitter saw continued growth last month despite their substantial downtime. So do you think social media site downtime really matters or is it just a bunch of loud people complaining about nothing?

Twitter is still trying to come up with a revenue model but Ian Schafer thinks he has already come up with a decent one. Ian has placed a sponsorship opportunity on his Twitter account. The winning sponsor will get their company on his Twitter page background, his Twitter avatar and a link on each one of his tweets.

With only 450 followers, the bidding on the Twitter sponsorship eBay auction page is already up to $545 with 3 days remaining. I’m not quite sure if this is a gimmick to try to raise his level of followers but this is a substantial amount of money for a 1-month sponsorship. As far as I can tell this is not against the Twitter Terms of Service so Ian may just end up with an extra few hundred dollars to spend.

I’m sure my followers would get angry at me if I kept putting a sponsored link on every tweet. I already catch slack for promoting my blog via Twitter so promoting someone else in addition would probably be crossing the line. Would you sell sponsorship on your Twitter account? How much would you charge?

It has been a hard week for Twitter. The site has been facing substantial downtime. The IM services have been shut down and it appears that tweets are now being throttled. Tonight Twitter has shutdown the service for three hours to update the database. While the message was only posted 15 minutes ago, there is definitely a chance that the service will be down for longer.

Throughout the weekend I haven’t been able to access Twitter via the TwitterBerry application on my Blackberry device. My guess is that API calls to Twitter were not consistently working. On Friday I posted about Twitter’s scaling problems and this is only one part of it. Most successful websites face issues as they grow in popularity but the amount of downtime suffered by Twitter has ranked it among the most inaccessible websites.

Having a service that is extremely popular is not a bad problem to have but the site is losing potential new users as the site continues to go down. Earlier this weekend Mike Arrington singled out Blaine Cook, an ex-Twitter employee, as the source of the problems. In my own opinion it was an unprofessional posting but that’s really not the main issue here.

As most users have pointed out, Twitter is a free service and it’s hard to complain about a service that has become extremely useful for many and will surely continue to grow. While I hate that Twitter isn’t consistently accessible, I’m sure that their development team will soon figure out a solution. With $15 million in the bank, Twitter should soon scale to become a leading communication tool.

There has been a bunch of drama in the blogosphere surrounding a recent blog post by Alex Payne, a developer at Twitter. It was Alex’s response to a bunch of feedback that they’ve received since the increase in service outages on the site. The center of the discussion revolved around the following statement which VentureBeat translated as Robert Scoble being the source of the problem:

The events that hit our system the hardest are generally when “popular” users - that is, users with large numbers of followers and people they’re following - perform a number of actions in rapid succession. This usually results in a number of big queries that pile up in our database(s). Not running scripts to follow thousands of users at a time would be a help, but that’s behavior we have to limit on our side.

Scoble took offense the reference and posted his own furious response on FriendFeed as though it was a personal attack on him. Ultimately this is just some noisy blogger drama but there is an important issue here surrounding scaling social websites. Facebook is forced to limit friends to 5000 people due to technical issues.

While Mike Arrington suggested that the friend limit may soon be raised, there is nothing else to suggest that the friend limit will be increased. It appears that FriendFeed and MySpace are among the few companies that have solved the problem of scaling the social graph. While Robert Scoble can frequently be the source of scaling issues due to his ability to incite mass dialogue, it’s also a great problem to have a great way to resolve bottle-necks.

While Twitter continues to face serious problems, it’s good that it is happening early on with the early-adopters and not late in the game when it could cost them their user base.

This past weekend, while most people were away enjoying the beginning of summer, uber-geeks sat around and discussed the ongoing troubles facing Twitter and how FriendFeed would deal the final death blow. If FriendFeed was consuming most of my discussions nowadays I might agree but unfortunately it has yet to win me over. While FriendFeed is beginning to drive traffic to my sites, Twitter still reigns king and Facebook still beats FriendFeed.

Unfortunately for the early adopters who believe that FriendFeed will become the online leader, there is still the majority that needs to be convinced and currently those people are spending their time on MySpace, Facebook and YouTube. I completely understand the benefits of using FriendFeed but isn’t it really just a feature that other social networks sites can easily embed?

In the battle for attention, FriendFeed comes nowhere close to Twitter. Just take a look at the chart below and you’ll notice that the early adopters such as Robert Scoble, Steve Gillmore have an argument which is not based on reality. Conversely, while writing this tirade, I’ve received 5 comments on one of my FriendFeed items. I still just don’t see FriendFeed going mainstream though.

Do you use FriendFeed actively? Do you see FriendFeed successfully competing with Twitter? Are they even competitors?