April 19, 2011 5:01 pm

Twitter enters bidding war for Tweetdeck

A bidding war has broken out for Tweetdeck, a small British company that has found itself at the centre of a new battle for control of Twitter’s most sophisticated and energetic users.

Tweetdeck, which is based near east London’s “Silicon Roundabout” cluster of internet start-ups, accounts for around 10 per cent of all the messages posted on Twitter, making it the most popular way to use the short-from messaging site after Twitter’s own website.

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According to people familiar with the situation, Twitter has offered $50m to acquire Tweetdeck, whose free software has been downloaded by more than 20m people to give them more advanced monitoring and filtering capabilities when using Twitter, Facebook and other social networks. Last week, more than 1m tweets were sent in a single day from its Android mobile app.

Twitter’s bid tops an earlier offer of $30m (£19m) from UberMedia, which already owns several other Twitter clients with 4m users. It is not known whether UberMedia plans to raise its offer, given Tweetdeck’s centrality to its broader strategy to leverage the most popular independent Twitter software, to create new advertising services and potentially launch a new sub-network for social media “power users”.

No final deal has been signed, leaving open the prospect that other bidders could yet join the contest.

At the same time, tensions are rising between Twitter and UberMedia, which is led by Bill Gross, a serial entrepreneur whose previous ventures include Overture, a provider of search-engine advertising technology that was sold to Yahoo in 2003 for $1.6bn.

“Tweetdeck is the first salvo in a little war [between Twitter and UberMedia],” said one person familiar with the companies involved. “There is something brewing.”

Last year, UberMedia launched PostUp, a system which allows brands or other Twitter users to pay to attract more followers – just days before Twitter itself launched a similar system of “promoted tweets” and accounts. According to its website, PostUp is being upgraded to a new system, “UberMarket”, in the “coming days”.

Then in February, Twitter turned of its “fire hose” of tweets to UberTwitter, UberCurrent and twidroyd, three apps for smartphones owned by UberMedia, claiming that they breached its terms of service.

Changes were made and service was resumed a few days later, but only after users of UberMedia’s apps had been prompted to download Twitter’s “official” mobile apps.

Since last spring, Twitter has been making greater efforts to take direct ownership of its users – rather than relying on an ecosystem of third-party tools – when it acquired the makers of Tweetie, then the most popular iPhone app.

However, as Tweetdeck’s popularity shows, some of Twitter’s most dedicated and professional users continue to prefer unofficial tools. A study by Yahoo Research last month found that just 20,000 of Twitter’s 200m registered users account for nearly half of all tweets read on the site, which it described as a “striking concentration of attention”. Many of those “elite” tweeters are Tweetdeck users, with news organisations such as Reuters and Sky News standardising on the software.

As well as launching new advertising services, internet industry observers have speculated that UberMedia – which would control around a quarter of all tweets generated if it owned Tweetdeck – could launch its own social network in direct competition with Twitter, offering extra features such as posts of more than 140 characters.

“It can’t make sense [for Twitter] to let this fall into the hands of Bill Gross,” Howard Lindzon, a Tweetdeck investor, told the FT. “The power-users are everything.”

The relationship between Twitter, UberMedia and Tweetdeck is complicated by the fact that they share several investors. Betaworks, a New York based internet incubator, and Ron Conway, a leading angel investor, have stakes in all three companies.

Saul Klein, whose early-stage fund The Accelerator Group invested in Tweetdeck, is also a partner at Index Ventures, the London-based venture capital firm which participated in UberMedia’s recent $17.5m round of funding.

Tweetdeck, which was launched in 2008, is yet to generate significant revenues from its software. It is one of several UK companies which have capitalised on Twitter’s rapid growth.

Iain Dodsworth, Tweetdeck’s founder and chief executive, and UberMedia had not responded to requests for comment at the time of writing.

“We don’t comment on rumours,” Twitter’s public relations team said via Twitter. “We don’t provide off-the-record background on rumours. We don’t wink twice or release puffs of smoke [about] rumours.”

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