Many people become frustrated when they hit the 2,000 following barrier in Twitter. It's a limit imposed by Twitter that few people know about when they start but most will run into. In short, it's an anti-spam device by Twitter. You can follow up to 1,000 people in a day, until you've followed 2,000 people. After 2,000, you can only follow 10% more people than are already following you.

A Case Study

Let's take the example of the campaign shown in the graph. Following 1,000 people a day is a recipe for a quick suspension. Twitter closely monitors brand new accounts for churning activity. You're much better off to follow about 300 people/day for the start of your campaign. So you sign up for the free version of our PMS Social Suite and enter a brand new account with a snazy new background, a good profile image, and a few well chosen tweets. Since the list we're using is so powerful, you're getting a follow back ratio of about 60%. In a mere 7 days you've followed 2,000 people and have 1,200 followers. That's very cool, so you upgrade to the paid version and put the campaign completely on autopilot.

What Happened?

Hey, who are these fly by night guys from Promote My Site? The next day the software didn't follow any more than the 2,000 you had followed the day before! Actually, that's not what happened at all. You've hit the 2,000 barrier with an out of balance account. With only 1,200 followers, you can't add anyone because of the 10% limit. The software will also only cull a maximum of 5% of the people you're following, which means at most you'll cull 100 people that aren't following you back. So if you cull 100 people, the software can only add back 100 people and perhaps only 60 of those will follow you back. So the going is going to be very slow for the next few weeks as you're able to gradually cull more people and follow more people each day.

The good news is that the software is relentless and accurate. It doesn't forget to perform your actions each day, although you might. Gradually, the account will come back into balance and you'll be able to follow more people. So the long flat area in the following line in the graph? The account is stuck at the 2K barrier until the followers are brought back into balance, and then the graph slopes sharply upwards because as you get past 2,000 you're able to increase the number of people that you follow each day.

By the end of 60 days you're at 16,000 followers! You had a tough few weeks as you slogged it out through the 2K barrier, but slow and steady wins the race. Now you're seeing real results.

Lather, Rinse, Repeat

Just like the instructions on the shampoo bottle, this is a good time to start over with a new account. When you're in the 15K range you'll be at the top of many directory listings for any niches you want to market to. Make sure you've signed up for directories such as Twellow. Guess how these are sorted? Yep, by follower count. The number of followers you have is social validation. By being near the top of the list you'll start to pick up followers in your niche because you're there. If you had tried to build a "quality" account by hand from scratch you'd be #2043 on the list and be seen as a mere peon. Now you're a player. If you've been tweeting on your topic you'll be rolling.

Now go ahead and create a new Twitter account and enter that information into the PMS Dashboard. Just click Edit, change the Twitter username and password, and click Update. You can switch your Twitter account as much as you desire -- whatever account is active when the process runs it what will get run. It's far more powerful to have 5 accounts with 15K followers than 1 account with 75K followers. Losing an account to a suspension won't hurt you very much, and you can have your accounts retweet the news from your main account.

The Benefits of Paid Vs Free

Most people hit the 2K barrier while using a free account. If they aren't culling their own non-mutuals, the system will appear to have stopped working. It hasn't stopped, it just can't do anything because once you've hit your limit of following 2,000 people you have to remove some of the people you're following in order to follow more. Don't fall to the temptation to mass unfollow the 1,000 people that aren't following you back in one shot. The 2K barrier is also the time that Twitter seems to pay attention to accounts to see if they're going to start churning. It's far safer to remove 50-100 people/day until you get over the hump. The fastest way over the hump is to have been removing those people along the way as you grew so that you arrive at the 2K barrier with a fairly balanced account. If you're using the paid service you won't run into that problem. You'll just see a flattening of the graph for about 10 days and then you'll be back to the steady growth you had become accustomed to. Go ahead and Sign up!

The latest meme in the Twittersphere has been a complaint about people that use services such as Tweet Later to send automated thank you notes to new followers on Twitter. SocialToo took it so seriously that they dropped that capability from their service. Chris Brogan, Amber Naslund, and Tim Walker have all written on the subject. In fact, probably hundreds of bloggers have written on the subject. I'm now probably going to provide you with the only article in existence that argues against the commonly held belief that auto-DMs are evil.

Trust Us, We're in Marketing

We use Twitter for business. We've written several articles that question the business viability of Twitter, so rather than being on Twitter for peace, love, rainbows, and unicorns, we're there for marketing while they're still around. The proposition to our followers is straightforward. We tweet useful information (and the occasional funny stuff) in the hopes that people will follow us and periodically click on the links to our blog posts. We write blog posts so that people will be drawn to our blog and hopefully purchase some of our products. Once people get to know us they're likely to spend some money with us. In the end it's just a numbers game. If we can't sell anything then none of those other activities make sense. So there's going to be some commercial content mixed in with our message. Anyone that is approaching Twitter (or blogging) for any other purpose has someone else paying their bills, because if you can't turn a profit it's not sustainable.

The Commercials Pay for the Content

So when you receive an auto-DM after you've followed someone, don't whine about it. It's the commercials that pay for the programming.

The people that rant against auto-DMs have something else in mind. If you dig deeper, you'll find out that they also have a problem with the concept of advertising on Twitter in general. As Tim Walker pointed out in the discussion in the comments section we had on his blog, several blogging purists were against people that were getting into blogging to make money as well. If people find auto-DMs offensive, imagine what the reaction would be to corporately sponsored tweets! Is there really any difference between a corporate tweet advertisement and the auto-DM?

Answering the Arguments

Let's look at some of the arguments that have been made against auto-DMs. I'll admit that these are valid if you're on Twitter for recreation, but if you're on Twitter for business networking then I think it's a different situation. Here are some of the arguments that Chris Brogan made in his article:

• Irks me because it's a robot. So I suppose he's stopped watching television and listening to radio? Those advertisements are automatic as well.
• Annoys me because you ask me to click your junk. That's funny, given this and this from just today. So a DM that is just to the person that initiated a follow is annoying, but pimping links to your blog and ebooks to all of your followers is ok?
• Tempts me to go back and unfollow you on principle That's the marketplace of Twitter. If you don't like what someone has done, or what they tweet, or don't find value, then just don't follow them.
• If you're too busy to be an actual human on a social network, don't join another social network. That argument would only make sense if the people that auto-DM only auto-DM and don't provide any other value. But since he initiated the follow in order to get the auto-DM back, he must have been interested in their profile. So what he's really saying is that he wants the information he gets by following for free, and doesn't have time to be bothered with a "commercial" that makes the content profitable to the provider. Twitter should be about Win-Win.
• Follower count doesn't matter. What matters is who you follow. Probably the biggest lie told by the "Twitter Gurus." Without followers, you're just talking to yourself. There's no point in tweeting if there's no one to listen. If all of his followers left him I suspect he'd stop tweeting because it wouldn't be worth his time.

• Conversations are way better than "new blog post" tweets. I agree, but the "new blog post" tweets pay for the conversations. Sure, you don't want to follow someone that only posts the commercials, but there's nothing wrong with mixing those into the conversations.
• What service are you doing me by direct messaging me sending me your links? Quite a bit, if the DM that is sent has truly useful information in it. I agree, don't just send a link that's already in your profile, but something special is, well, something special. And what's so bad about getting the fairly common DM of "Thanks for following?" Are we all so highly stressed and easily offended that the mere courtesy of thanking someone rankles us?

Now let's take a look at Amber Naslund's arguments:

• If you hit me with a spammy sounding DM right when we get connected, I instantly think your community participation is a sham. Except that you've read through my tweets and have already come to a conclusion about following me. You've said "I'd like some free information please" and are upset about the tip jar on the counter.
• You don't know a thing about me yet, except what you read on my profile. How on earth do you know that what you offer is of value to me in the least? I don't, other than you followed me and that people who follow me tend to be interested in what I have to offer, which is why the auto-DM to followers is a reasonable message channel. Only a small percentage of the people that see a commercial on TV will be interested in the offer either. It's a numbers game. Getting upset about it is demanding labor for free. You want to see the work product of the tweets of the person you're following, but you won't accept anything except a 100% customized message?
• I'm a very social person, and dig meeting new people. Truly. So I'm excited that you're following me. Actually, she's got that backwards. She's receiving the auto-DM because she followed them, not vice versa. The only way you can get these messages is to follow someone.
• If your business proposition is more important than saying hello and getting acquainted, then it's clear to me that you don't feel the same way about people as I do, which means we'll probably have little in common anyway. We already said hello. You read my profile and clicked the follow button. You said "Hi" and I said "Hi" back and handed you a business card. That's completely acceptable behavior at a business networking function like a trade show. If you're at a different kind of party then I am, then just unfollow and walk away. But you came to me and said "Hi", I didn't initiate things, so stop whining when I act in a reasonable manner for the context I'm operating in.
• Like many, many other people, I do business with people I like and trust. But like and trust are not instant affinities. So you like and trust and have a personal relationship with your phone company, your power company, your grocer, and your mortgage processor? I'll bet the last time you filled up your gas tank you did it through a completely robotic interface. You can't build up trust merely through a conversation anyway -- trust depends upon performance. And frankly, I find it really hard to trust someone that claims to be completely altruistic and providing everything for free, when I know they have to be making money through their activity somehow in order to survive. I'd much rather deal with people that are up front about why they're here.

I don't disagree with the points that Tim Walker from Hoovers made. Go read his article and the comments below -- we had a very civil exchange. At Promote My Site, our approach to Twitter comes down to a numbers game. We picked up 6,000 followers on the Lt_Draper account in February. We had an auto-DM set up that thanked people for following and asked them to add our rss feed to their reader. We've had several people tell us that our rss feed is hard to find, so we thought that was reasonable "extra" information to put in the welcoming DM. Evidently a lot of people thought so too, because our feedburner stats more than doubled during the month.

Compare that to trying to manually research every follower (click their profile, click their website link, read their recent tweets and really get to know them). A very cursory approach might take 5 minutes each. That's 500 hours of labor for the month. Oliver and I are workaholics, but there's just no way we're going to be able to handle that. So instead we use an auto-DM. It probably does offend a certain number of people, but I'm guessing they weren't potential clients anyway. If you're so wrapped up in the idea that everything on the internet should be free and you don't want advertising interrupting your flow of information, then you're probably not going to purchase a subscription to our site.

So don't follow. But quit whining.

I'm not saying this has happened to you, but if you spend much time at all promoting your site in social media, eventually you're going to need a new ip address. Maybe the 20-something sysadmin was in a bad mood and was feeling the need for a power trip, or maybe you made a mistake and pushed the envelope just a little too far. But getting banned on most social networks means that they'll ban any further signups from your IP address.

Digg has an Odd Policy

This policy has really never made much sense to me. They've banned your account, so you've lost all the work you put into their site and the prestige you've built up. You'd think they'd just let you have a reset and say "Go forth and sin no more." But many sites, especially Digg, have the strange idea that if they ban your account, you're banned for life. You can never come back.

That's odd in Digg's case, because that's not what their TOS says. In fact, their TOS says nothing about multiple accounts at all. The closest anything on their site comes to saying this is in their FAQ:

To protect the integrity of the system, our policy is one person, one account. This is to help prevent users from artificially inflating Digg counters, which is explicitly against our Terms of Use.

So even the FAQ answer doesn't support their policy. As long as you have only one account, you're completely within the terms of the TOS and even their interpretation in the FAQ. Their claim that once you've been banned you can never come back just isn't supported in the agreement you made when you joined the site.

One also has to wonder how many thousands of people are cut off when one of these social sites demonstrates their lack of understanding of the architecture of the internet and heavy handedly bans an IP address for the router that stands between the internet and an entire Fortune 500 company or a university. If you're going through a firewall, it can appear that there are thousands of machines all with the same IP address.

Getting a New IP Address

Many people think their IP address is 192.168.0.1. Sorry, but that's a subnet reserved for local area networks. If you run "ipconfig /all" from a DOS prompt you'll see a number like that if you're behind a firewall. What you really want to know is the IP address of the device that the outside world sees. You can easily see this by going to http://whatismyip.com/. That's the address that the social networks see from you.

For most people, getting a new IP address consists of unplugging their connection to the internet and plugging it back in. Power cycling your DSL or Cable modem is usually enough to get a new DHCP assigned address. Very few people have real static IP addresses since that requires a special set up on the part of the ISP. What many people do run into is what Road Runner does: the IP address is stored on the cablemodem, so the modem keeps the same IP address between power cycles. There's an easy way around this.

With Road Runner, the cablemodem is storing the MAC address (Media Access Control) of the device connected to it on your side of the firewall. So if you've got the standard setup of PC -> Router -> CableModem, it's the MAC address of the router that the cablemodem is tracking. As long as the same device is connected, you can power cycle the cablemodem all day and the IP address is not going to change. So what you want to do is change the MAC address of the router. With a Linksys router, just go to setup -> MAC Address Clone and change one of the numbers. Click "Save Settings" and then power cycle your cablemodem. When it wakes back up, it will see a different device attached to it and it will require a new IP address on its site. Tada! New IP address for you. It's about a 5 minute operation.

At first glance you'd think changing the MAC Address would be dangerous, but it's not. The MAC address of your router is only being seen by the cablemodem. You don't have to worry about someone else on the internet duplicating your MAC Address because your cablemodem can't see anything but your router anyway. If you're really worried about this then you could always plug a different PC into the router and click "Clone My PC" and it will copy the MAC address from your PC to the router, but there's really no point. MAC address spoofing only takes place on the local network, so no harm done.

Clean Up After Yourself

Don't make the mistake of then immediately logging into the social network and creating a new account, because there's still a way they can spot you. You've still got the cookies in your browser from your last session, and in the case of Digg those are long term and point back to your previous id. If you don't want to lose all your cookies across all sites, then instead of clearing all cookies, in Firefox you can go to Tools -> Options -> Privacy -> Show Cookies. Scroll down to the name of the site and click "Remove Cookies".

Another thing to keep in mind are alliances, such as Digg and Facebook. Digg can't see your Facebook cookies (think about that, it would be a huge security violation of a browser allowed cross site cookie viewing), but if you click on a link to a Digg page from your Facebook account they'll see your Facebook id, and they know how to match that up with your previous Digg ids. I know someone that claims to have been busted that way, so just be aware.

I'm going to propose something rather radical. You should get rid of most of your friends on social media sites that you're targeting to promote your site.

We've talked about how you should stop shouting on Digg. But you can take it one step further. Most social media sites now discount the value of a vote from a friend. While they encouraged everybody to build up friend lists through the features of their sites, at the same time they devalued the votes on your submissions from your friends. The social sites can't make up their mind, but you can.

What if your account on a site such as Digg had just enough friends to have a footprint that looks reasonable, but mostly got votes from people completely unrelated to you? That would be the ultimate power user. So how do you go about doing that?

The "Normal" Digg Strategy

Most gurus will tell you that you should follow the strategy of friending the top users on a site and vote for their submissions. We've promoted that strategy quite a bit in these pages too. You get the attention of the top users by giving them vote love, and in return they'll start to vote for your submissions. This strategy works particularly well on Digg.

The problem is that it takes a few hundred votes to get to the first page if you're mainly getting support from friends, and there are only at best a few hundred users on Digg that understand how the game is played that will reciprocate. But once in a while a story hits the front page with < 100 votes. How can that happen?

In those cases, the stories are getting votes from such a wide variety of unrelated yet strong profiles that the algorithm flags them as hot. So your strategy should clearly be to get the attention of those top users, but without actually making them a friend on the site.

You could just create an account and start sending emails and IMs to the top 100 Diggers, but you'd get flicked away as a social flea since you haven't shown them any support. Unless you're someone everybody knows that strategy isn't going to work that well. But what if you could easily vote the submissions of the top 100 without ever friending them in the first place?

It's Staring You Right in the Face

One of the main reasons that people build a large friend list on Digg is that the site makes it very easy to view the queue of submissions of your friends. When MrBabyMan wants to "support his friends" (known to the rest of us as blind voting people he has "vetted"), he just goes to his friend's submission page, opens every link, and clicks the Digg button. Or perhaps he just loads the RSS feed of his friends submissions (see the little feed icon in the top right corner of the "all recent activity" tab on that page?) and votes them from a reader. If you want to be one of the people that he does that for, you need to start digging all his submissions until he notices you and makes you a friend. You'll also need to submit content that he feels that he can trust. Lather, rinse, repeat for the Top 100 Diggers and some percentage of them will friend you back and you'll have a stable of votes you can call upon when you're in need.

But you don't have to friend him to get his attention. There's also an RSS feed for his submissions page. Just load the rss feeds for the submissions of the top 100 Diggers into an rss reader and you'll have a steady stream of content that you should digg in order to get attention. And you didn't have to friend anyone!

Making This Easier

Since this is Promote My Site, we're obviously going to show you a technical solution to make this process easier. Instead of maintaining 100 different RSS feeds, you could just use the Yahoo Pipes mashup of the top 100 Diggers submissions. This pipe reads the SocialBlade Top 100 list to pull out the top diggers and then combines the feeds of all of their submissions into a single feed.

Instead of going through the pipe, you can just go directly to the RSS feed: http://pipes.yahoo.com/pipes/pipe.run?_id=qtyf1ery3RGVaDdodfQQIA&_render=rss. Yes, it takes a little bit of time to run, but you won't notice that if you're accessing it from your reader. And you'll always have a steady supply of articles from the Top 100 to Digg.

If you were smart you'd be jumping on those articles and digging and commenting on them as soon as they became available.

If you were really smart you'd consider posting the good ones to other social media. People often complain that a lot of what MrBabyMan submits is from Reddit, so turnabout is fair play, right?

While the sub-prime mortage mess has gotten a lot of press about the excess of sheer idiocy and greed in certain financial institutions, the second great VC funded dotcom bubble has been every bit as crazy and yet receives little coverage. Sure, the amount of money wasted doesn't even remotely approach what's going on in the broader markets, but somehow this business got away from counting revenue and started counting eyeballs. And that's after everyone swore it would never happen again after the crash of 2000. I guess the problem is that most of the 20-something CEOs weren't around for that crash, and most of the VCs just don't know any better.

So this week, the news has been hot and heavy that twitter has raised yet another round of venture capital. Which is really impressive considering the current venture capital climate. The new valuation is widely reported as $250M. The Twitter team is to be congratulated, because while they haven't done much on the revenue side, they sure can raise money! I made the statement several times that Twitter wouldn't be able to raise more capital. If these rumors are true, then obviously I was wrong. Luckily, that's just the first time (you can ask my wife about that).

So Why is This Bad News for Twitter?

It's probably not, but the link bait value of the title was just too good to pass up.

But this really can be viewed as bad news for Twitter. People are heralding the $250M valuation as confirmation of Twitter's value. You can spot the people without any experience in VC funded startups because it's nothing of the sort. The pre-money valuation of a company in a round of venture funding is merely the number that sets the minimum payouts for the exit. Let's say you have a company that is absolutely worthless. A VC comes along and says "I'll give you a $1M valuation. I want 10% of the company for $100K." You take the deal and think "I'm a millionaire! My company is worth $1M!" No, your company has the same value it did, plus the $100K in cash you now have in the bank. But if you wrap up the company, you owe the VC their $100K back (last money in, first money out) plus whatever guarantees you had to make. The usual term is a multiplier of three. So had you sold the company for $300K, you would owe the VC $300K and you'd be left with nothing. A lot of term sheets require that the VCs get their money back, plus the guaranteed multiplier, plus guaranteed back dividends, and then you split the proceeds along the percentages. So let's say you sold the company for $1M five years later. It would be very easy to owe the VC $300K, plus $200K in dividends, and then you'd split the remaining $500K according to your percentages. And by the way, there are a hundred other things in the deal that will take care of the VCs before you. The founders only do well when the startup hits a grand slam. Hitting a single or surviving means the founders get nada. And that's as it should be, because without the VC's money they wouldn't have had anything anyway.

Remember that criteria if you're ever thinking about taking venture capital. It only makes sense for the founders if without the VC money they wouldn't have had anything anyway. Other than that, you're just signing up for an 80/hour week job with little pay and tons of aggravation. If you're not swinging for the fences and starting with nothing, you shouldn't go near a venture capitalist.

So what does this mean for Twitter? Go back and read the fire sale article we did last August if you didn't click the link the first time. By doubling the VC money in, they've doubled their yearly revenue break even point, and added another 20x factor to the exit number. When they had $20M total in VC money, they had to sell for $400M in order to be a win. With $40M in, they have to sell for $800M. They've just doubled down at the roulette wheel. Keep in mind that the only other thing the $250M valuation means is that they may have reset the percentages of earlier investors too.

Other than seeing an increase in users, what have they accomplished in the last year? Since their last venture round they had the Summer of the Fail Whale, shut down SMS in several countries, throttled their API, and still don't have a revenue model. Oh, and they turned down a bunch of Facebook stock that probably wasn't worth as much as they already had capital in. But they were able to raise another round of VC money, so you really have to hand it to them.

Revenue Prospects

Despite a ton of chatter on the intarweb about possible revenue models for Twitter, I still haven't seen a single model where the numbers break down into any hope of Twitter hitting the break even point from a VC funded standpoint. Most people think of revenue break even as being able to cover your expenses (revenue in > cash out). When it's postive the owner can usually sell the company for some multiplier of either revenue or earnings. That's true of a normal business, but the numbers are different in a VC funded business. To be a success, the company has to sell for 20 times the investment in. Less than that and it's a miss and the VCs will lose interest and wrap up the company. Twitter has the advantage of being so hyped right now that they'll keep interest, but that won't last forever. When the revenue numbers eventually start to come in and the business model doesn't work the fire sale signs will go up.

Once again, Marketing Pilgrim took a stab and getting Twitter some revenue. There were some very novel ideas there. Let's take a look at those and some other ideas floating around the net for how Twitter is going to hit it big and become a cash cow:

• Search and Analytics - They've got a ton of data, and it should be straightforward to put together a search engine that's compelling. The ability to get to real time news in the twitterverse has to be worth something, right? There are a ton of problems with this. First, how much would anyone pay for this? Either through memberships or advertising, access to the search data just isn't that compelling. And the search data is already available for free now -- anybody can just spider the site. Google already has. You can find anything you want with the appropriate site:twitter.com query. If Twitter can become the next Google by monetizing search of their data, then why haven't all the other social networks been able to monetize any of their data?
• Twitter as a Protocol - Alistair Croll suggests that Twitter isn't a site but a protocol. I agree with what he says in the article, but the jump that others make that somehow Twitter can monetize this fact just doesn't add up. The reason protocols work is that enough people agree on them, which means they're very difficult to monetize. A monetized protocol has another name -- a closed standard. The same thing that made Twitter so popular to begin with -- a plethora of third party apps to make up for their interface -- is also the reason they can't monetize. They don't control the user experience.
• Sell API Access - The idea here is to sell unlimited API access to certain companies. The problem is the market isn't very big. Take the total amount of revenue all those companies could generate, and then multiply that by a small percentage that they could afford as a "tax" on their business and you have the amount of revenue Twitter can generate from this. That's why Twitter throttles their API rather than trying to pursue it as a revenue opportunity -- there just isn't enough money there to make it worthwhile. Could this possibly be a business model with more than a few million a year in revenue? Doubtful.
• Sell an Enterprise Version - Much like the Global 2000 already blocks AIM, MSN, and other chats out of security concerns, it's only a matter of time before they figure out that Twitter is a giant security hole that's leaking their confidential information and start blocking it. Imagine a lawsuit where the plaintiff is showing the jury the CEO's tweets! So the solution is to just have Twitter transform itself into an enterprise software startup and sell a private version of Twitter to run on the corporate intranet. Those of you with experience in the enterprise software market can now take abreak and wipe the spewed coffee off your monitor. To those of you who don't let me explain a few things. 1) Twitter is Small Fry in this Market. Competing with IBM, Oracle, Microsoft, and SAP will not be a pleasant or lasting experience. The most they could accomplish is to establish that the market exists. All of those companies could roll out a secure enterprise version of Twitter that works in their own architecture in a few months. In fact, they may already be doing it. Twitter small group of business development people are not going to compete with 10,000 IBM salespeople. Oracle could drop more money into a marketing campaign for a new twitter product than Twitter's current valuation and it wouldn't even approach a round off error. Microsoft could put it into Office for free. At the same time, they'd all be telling their customers about the security risks of allowing their employees to use the free version of Twitter, cutting into their market. 2) Startups Can't Sell to the Enterprise. It used to be the case that two guys and a coffee pot could write some great software, sell it to a big company, and get rich. That ended during the crash of 2000. Enterprises became completely gunshy after getting burned by the Dotcom 1.0 failures. Add in the post-Enron compliance standards and selling into the enterprise became a game only for the very large. That's why the startup software model moved away from enterprise sales -- either to open source, advertising supported, or membership/SaaS. The first question to every Twitter salesman would be "What about the fail whale?"
• Insert Affiliate Ids into the Twitter Stream - This one is cute. They could analyze the twitter stream and every time someone posts a link to Amazon or something similar they could modify the URL and put in their affiliate code. Or they could do their own version of TinyURL and move people into something that's framed with advertising. I don't think most people would be happy with having their links hijacked. By drawing attention to the affiliate opportunities they'd just encourage people to put their own ids into any links. And frankly, it's just not that much money. Go look through your last 1,000 tweets. How many of them were monetizable links? Perhaps they could do a Kontera deal and turn words in the twitter stream into hot links. Take Twitter's 40M visits/month times 10/pages/visit and you get 400M page views. Let's say 10% of those have something that can be monetized (highly unlikely it's that high since your last 1,000 tweets didn't). If you get a click through on affiliate ads of a half percent, and 1% of those convert, you're getting 2K conversions/month. If they got a $10 commission on that, it's a $240K/year business. And I think those numbers are WAY overestimated. Of course, how long would it be before the third party tool vendors just replaced that? Or someone wrote a FireFox plugin to get that junk out of your way?

There are lots of other ideas out there and I'd be glad to hear them. But before you claim that you've got the idea that will save Twitter, be prepared to show how the amount of revenue you'll generate will turn them into a billion dollar company. Because with this last round of VC money, that's where the bar has been moved to.

So What is Their Plan?

Remember the criteria for when to take venture capital. When you don't have anything without the money. Twitter meets that criteria. There's corollary to this as well: If you can't get a big exit, keep raising money and have a good time. Perhaps the Twitter guys are swilling the koolaid and still think they're going to build a billion dollar company. Or maybe they're just chuckling at how foolish the VCs still are. They're young, they're famous, and they've got a ton of cash to play with. They're the 16 year olds that have been handed the keys to Dad's car and a bottle of whiskey for their birthday. People complain about how tough the dotcom crash of 2000 was, but frankly there were a lot of CEOs making a ton of cash and throwing great parties. The Twitter guys are living the vida loca. They just may know something the Twitter fanboys don't know and are living it up while the living is easy. Given the numbers, that explains raising this last round of capital better than any other explanation I've seen.

BTW, the news of this last $20M are just rumours. Nothing has been announced. There's many a slip between the cup and the lip. The VCs still have to make their capital call, and we're likely in for a rough couple of months in the market. They may find that negotiations break down at the last moment. A term sheet is not a check.

I'd just like an invite to the party when they close the deal.

Last August we did a post on Voting Rings in Social Networks. At the time there were a number of sites trying to cater to people that wanted to exchange votes with other social network users. The "industry" has changed quite a bit since then, and it bears re-examination.

First, let's define what we mean by a vote exchange site. These are websites that allow their users to "trade" their votes on social networks for votes for their own sites. It formalizes the "I'll scratch your back if you'll scratch mine" paradigm in which most social network users participate. While when building up a friend list on Digg or StumbleUpon it is expected that your friends will vote for your stories in exchange for you voting on theirs, these sites formalize that process. They track who is voting on what and make sure that your time is not wasted by voting for submissions by other users that don't return the favor.

Isn't This Evil?

The social media purists will scream "Spammers!" when they see these sites. To the people that use these sites for the love of the social web and not for marketing it probably seems that way. But for those marketers not riding unicorns and chasing rainbows, it's just a fact of life.

We're not going to pass judgement on these activities. Some of these sites proclaim that "you should not vote for things you don't like" in order to avoid violating the TOS of the social networks. The plain and simple fact is that a lot of vote exchanging takes place in social networking. The top social network marketers are all doing it, if not explicityly through one of these voting rings then implicitly in the relationships that they develop. If you think you can compete with them without undertaking this kind of activity, then perhaps social network marketing is not for you.

Review of The Leading Sites

Interestingly enough, the sites we spotted last August are mostly still around. That's amazing given that Digg's legal team has been active and sent a cease and desist letter to uSocial.net, a site that claims to be able to sell Diggs, Stumbles, and Props.

All of these sites have some problems in common:

• You Don't Know Who You're Voting With - Everybody that uses these sites is in one giant pool. If Digg decided to go after one of these sites, all they would have to do is sign up, submit a few articles, and then see who votes on them. We have very good reason to believe that these social networks do exactly that.
• The Article Quality is Poor - Since you don't know the other members in your voting ring on these sites, you'll see a lot of "Cheap Viagra" and "Hot Babes" type submissions that you'll be asked to vote on. If you're using a throwaway social voting account to do the votes then that isn't so bad, but you can't build up your primary account using these sites. And there's a lot of junk to wade through which makes using the sites difficult. And if the social networks want to find people to ban, a good place to start is the people voting for those spammy submissions.
• You Could Get Sold Out - Given the "fly by night" nature of some of these sites, do you really think that if one of these rich social networks offered the webmaster a few thousand dollars for a copy of their user list they'd keep mum?
• They Might Leave a Footprint - Most of these sites have you click on a link to take you to the story to vote. The problem with that is that if they haven't handled setting the referrer correctly, where you came from may very well show up in the logs of the social networking sites. Again, you'll be signing yourself up for a trip to ban city.
• They're Centralized and Not Cell Based - There's a reason guerrilla fighters work in cells, where no one person knows everyone else in the organization. These sites are all centralized. So if they get penetrated, everybody gets rolled up.

Now while you may not be concerned with having your throwaway social networking account banned, you should be concerned that the social networks may trace your activity back to the sites you were promoting and ban those sites. Getting your site banned on all the major social networks could put a serious crimp in your marketing plans. But this could be used in a devastating blackhat attack on a competitor's site!

So let's look at some of the leading sites:

• SUExchange - This is a straight stumble exchange. At the time of this post, they claimed to have 3,891 users, 85,874 votes, and 9,501 sites in their system. That's a big ring! The problem with this site is that the verification method is quite time consuming. First, you vote on a site. Then you use their site to send a message to the owner of that site to verify that you stumbled it. So you could end up stumbling a lot of sites without ever getting credit. Worse yet, the owner of the site has to know who you are and that you voted through the exchange in order to verify you. You're letting a complete stranger know that you're part of the system.
• StumbleUdon - This one is downright scary. You give them your stumbleupon user name and password and they use a bot to perform stumbles on your behalf. I guess the real question here is how many people are foolish enough to do this?
• StumbleXchange - Another straight stumble exchange, this site claimed to have 6,689 members and 126,694 stumbles in their system. Which is odd because they were showing only 2 users online and the website was down for a few hours when I was trying to research it. The way this one works is quite concerning as well. In order to vote, you friend the owner of the site you're voting on, then vote on their submission. After you've done that 10 times you click a button to have StumbleXchange verify that the votes were made. I don't vote on anything, but three of the accounts (the top ones) that it suggested were all marked as "under investigation" by StumbleUpon. And since friending on StumbleUpon now requires that the recipient approve the friend request, this seems like it could be a rather drawn out process. But the worst thing was that rather than take me to the article page, it took me to the Stumble review page for the article. Can you say footprints?
• Social Traffic Exchange - This is a forum for exchanging social votes. It's up to you to verify that the votes were cast, and there's a clear record for anyone that wants to see who is participating in the scheme.
• Piqqus - Appears to still be going strong. This site allows you to exchange Diggs, Stumbles, and Props. It's smart enough to verify the votes on each of those networks itself, and they appear to know what they're doing with the referrer data. Other than the generic problems with these sites in general, Piqqus seems to have its act together.
• 1rstlink - This looks like it has potential, but it only has 50 users and while it covers many other networks than Digg, only the tasks in Digg seem to not be mostly spam. I had an account on this last summer and it never seemed to turn into actual votes even though I was voting the tasks at the time. If it weren't for the generic problems of these sites in general, I'd say this one could be a leader if it could get some momentum. I also can't see how they're making money, so that may explain the lack of momentum.

If you're desperate for traffic, then these sites might fit your needs. There are definate risks involved, but they all have the potential for driving traffic to your site and they're free if you don't count doing the work.

But there has to be a better way to manage working in a social voting group. I wonder what that could be? Subscribe to our RSS feed and you'll be likely to find out!

What exactly does a social media professional do when they're shepherding a story to the front page of a news site? Aside from all of the other support activities that surround having strong profiles, being an active member in the community, and building off site relationships with as many people as they can, the tactics for getting to the front page really just consist of:

• Prepare the article. This may sound simplistic, but there are a lot of factors to consider. For instance, many people make the mistake of not putting a "Digg This" badge at the top of the article in plain sight even though they're targeting Digg. If you're going to promote an article, you have to make it easy for people to vote. Whatever sites you're targeting (Digg, StumbleUpon, Reddit, Propeller, etc), make sure that it's easy for your users to vote for your story.
• Submit the article. There are certain times of the day that articles should be submitted, and you should only submit from a profile that can carry the article. Which also means not always submitting your own articles but getting someone powerful to do it for you.
• Solicit Your Friends. The professionals will maintain a list of people that they can call upon for votes when they need them. Newbies often make the mistake of emailing/IMing everyone they know when they first submit the article, which means that the article gets an initial burst of activity (from the same people all the time) and then dies out. The algorithms on most sites will recognize this pattern. What the algorithms are really looking for is a steady increase in interest. The professionals work their list throughout the first 24 hours until they get to the front page. If you've got 200 people you can ask for votes, you'll want to spread that out to 10-15 votes per hour.
• Defend Your Turf. Get some of your friends to make positive comments on the article early on. The bandwagon effect can be quite powerful. Especially if you're submitting material that is somewhat commercial in nature, it's only a matter of time before somebody comments on the article about why it is lame and they're burying it. Get on that right away and get several people to comment back defending the value of the article. Keep a reserve of votes that you can call on because when the "Digg Mafia" tries to knock your story out you'll need votes to fight back. (Note that while Digg is the example, this behavior happens across most social networks.)

Lather, rinse, repeat. I've seen pros literally babysite an article around the clock to get a front page. People think that the top social media marketers just drop articles on sites and watch the traffic roll in. In fact, it's very hard work. Getting to the front page can bring in a ton of traffic, but it's far from easy.

But I Don't Have Time For This!

If you're an internet marketer then being a social media pro probably requires more time than you've got available. There are a lot more components to your business. So your options are:

• Outsource Your Social Media Marketing - You can hire other people to do this part of the business for you. The going rate for a guaranteed front page on Digg seems to be about $3,000 USD. That may seem like a lot of money, but a successful front page on Digg can bring 100,000 visitors, so your cost is about $0.03/click, which is a lot cheaper than most pay per click alternatives. While the people making big money don't blink at those numbers, it's a little steep for those who are just starting out in internet marketing.
• Ignore Social Media Marketing - This is what most internet marketers seem to be doing. Or they just do a very bad job of it. Submitting your article to a few social networking sites and getting 10 votes on your story is useless. Sure, you'll get a link, but the search engines are smart enough to calculate the internal link strength on the social network pointing to your article and will conclude that the link shouldn't be very strong. Worse yet, if the search engines look at the 100 sites that you spammed your bookmarks to with an automated tool and link that up to your profile that shows you're just self submitting, you could be in for the dreaded "Google Slap." Google warned everyone about this last year, so it's only a matter of time before they go after the social link spammers the same way they did the paid linkers. One wonders if there is a blackhat technique that could be based on submitting your competition's sites in a spammy fashion -- all the more reason that you can't just ignore social networking.
• Pick the Middle Ground - You don't have to duke it out with the "Big Boys" in social media to be a success. As we've explained several times before, there is a ton of value to be had from having moderately popular stories. On Digg, the line seems to be around 50 Diggs. Other sites will vary, but the key is that your submissions get enough votes so that while they may not make the front page, they collect enough internal links from powerful profiles that the search engines conclude that the story page is important. If it's a "dofollow" site like Digg, so much the better. But even if you aren't getting SEO value from the links, having the social media link appear in the SERPs is a very good thing. First, what do you think a user is likely to do once they visit that page? Yep, click on your link. And if that page is taking up space in the top of the SERPS, it's a position that your competition doesn't get. A competitor that was comfortably sitting at #2 can find themselves pushed off the first page with well supported social media pages.

Your key in pursuing this middle ground strategy obviously is to find ways to efficiently gather a lot of votes for your stories without it taking over your life. Our PMS Social Suite, while it is certainly powerful enough to get you to the front page (and it's what some professionals use for just that!), it's real value is in allowing you to spend just 10 minutes a day to build a powerful profile that can get you into the sweet spot on Digg.

But there's another way to hit that sweet spot, and it works on every social network, not just Digg. If you've wondered why our blogging frequency has gone down as of late, the reason is that we've been feverishly working on a new product. We're almost done and getting ready for beta testing. It's going to be free, it will completely rock your world, and you should stay tuned.

When you get past all the slick used car salesman drivel over at the Warrior Forum, once in a while you can find some real gems.

Go read that post. The strategy is pretty simple, but it illustrates how you can use automation to save yourself a lot of time and still use social media the way it was meant to be used. There aren't any scripts or anything even remotely unethical going on, yet he shows how to generate a lot of backlinks with very little work.

Now if only I could find a tool that would read an rss feed and create a bookmark file consisting of all of the items in the feed. You could point it at your blog and presto you'd have bookmarks for every article. Or you could point it at your rss feed of your digg votes. Or your stumbles. Then whenever you dugg or stumbled something you'd be adding extra bookmarks across a couple of services with very little work.

Anyone know of such a tool? Or is that something we should write?

Those of you who have been with us for a while remember the good old days of Digg (last summer) when all you needed was a good greasemonkey script and you could click your way to Digg riches. My have times changed. Now even mentioning the concept of a script will get you the evil eye.

A lot of us got banned when Digg was on a banning rampage. It's not a big deal -- a Digg banning is a red badge of courage these days. While some notable names have moved on to other social networks such as Mixx, most of the banned players have come back with a new account. And something tells me that Digg isn't too happy about that.

An Odd Email

My LtDraper account was banned by Digg. If you waste time clicking that link you'll see the famous Oops screen. It seems they weren't too happy with my writing and releasing for free a greasemonkey script that allowed people to delete their shouts with one button click. So imagine my surprise when I received the following email a few weeks ago:

Hey there! Sean Graham is your latest fan. He became your fan because he likes what you are up to on Digg and wants to see what you think is interesting. You can either leave him as a fan or add him to your own list of friends. Check out his profile here: http://digg.com/users/tbsmediallc?OTC-em-fn1
Cheers,
The Digg Crew

A Phishing Attack!

At first I thought this was just a bug in Digg's system. It's not like they're not the masters of producing bugs. And it may very well be.

But then I started to think about it some more. This could be a rather sneaky "phishing" attack by Digg. Just send what look like innocent emails to the email accounts of previously banned users and see if they click on the friend link to check it out. They could then easily look at the IP address and check that against the IP addresses of current users. If someone had changed their IP address and started a new account, they'd be able to catch them.

I've asked around to a few Digg power users with new accounts, and they've started seeing the same thing. Digg is sending out friend notification emails to users that have been banned. I'm now getting a few of those a week now.

I posted this theory over at the Warrior Forum and R Hagel suggested that:

If that was their evil plan, now that link will be associated with a bunch of IPs (as I'm sure a bunch of people will click on this link in your post).
Hmmm, maybe that was your evil plan all along? :}

If this is just a glitch in Digg's software they're inadvertently sending me spam. Yes, it's spam because by banning me they terminated our agreement and no longer have permission to send me email. It's UCE through and through.

How to Sink the Boat

I said at the time that Digg was wrong for going after the script users. They were in talks with Google at the time and Google probably told them to do it since their interest was in the quality of links coming out of that PR 8 domain. That didn't work out so well. More importantly, according to popular reports, their traffic and revenue have gone down since September. I can understand revenue going down when the economy started to tank, but social media sites should see an increase in traffic as people scramble to network to find jobs and have extra time on their hands.

Digg has been running at a loss. Their business model is to be a hot company and attract venture capital. That's not a viable strategy for the future. They shouldn't be turning away users that used a script in the past but are now clean. They shouldn't be wasting precious time and resources on a witch hunt.

Before Digg went on its banning rampage, they had a little bug. If you had friended someone that had their account banned, you'd get an error when you clicked on the "remove friend" button in their interface. If one of your friends were banned, you couldn't remove them.

That wasn't such a big deal when bannings were few and far between, but with the recent spate of bannings Digg had created a bit of a problem. There is a hard limit of 1,000 friends for a user on Digg. So if 100 of your friends had been banned, you were effectively left with only 900 slots.

A few days ago I noticed that Digg had finally fixed that problem. I don't know when it happened, but at some point they implemented a kludge that allows you to delete friends that have been banned.

The Good News

As the saying goes, I told you all that so I could tell you this. By fixing that bug, they've introduced a new bug which most power users will find is a real feature. If you were a banned power user, one of the most stinging aspects of the ban is the loss of all your friend data. You'd spent months building up a nice friend network, and now all that data was gone. But is it?

Try this page: Oliver Taco's Profile. Yep, it's the oops page as expected. Now try the same page but via the Digg API. Again, as expected you get a "No such user" error return. Now, try this: Oliver Taco's Friend List.

The data is still in the database. They couldn't delete the linkages because that would obviously break something else that allows the banned users to be removed as friends. So the upshot it that even if your account is banned, you can recover your friend list. Just replace the user name and change the value of "offset" to 100, 200, 300, etc and you'll get pages of data 100 records at a time. If you want a list of your fans, just change the "friends" to "fans". BTW, that's an XML file that you can download into Excel if you want to see a pretty spreasheet.

Of course, if you were using a tool like the PMS Social Suite none of that would be a concern because you'd be concentrating on building real relationships outside of social networks and wouldn't be a victim of the whims of Digg.