Yesterday Twitter announced that it will be making some dramatic changes to how it allows developers to use its “fire hose” of tweets in their Third Party applications.  There seems to be vast implications for everybody building — and using — content aggregating and social media services, including Klout, Storify and many other popular services.

An excellent summary from eConsultancy called “The Twitter API as we Know it is Dead,” reports that one of the biggest pieces of bad news is that Twitter is changing the rule on how applications showing tweets should display them.  If you want to use the Twitter API to display tweets, you will, for instance, always have to display the author’s avatar and the text of the tweet below the author’s name and @username.

Building an awesome mashup that displays tweets alongside content from other services? As ReadWriteWeb’s Jon Mitchell observes, one of the new requirements is that “Tweets that are grouped together in a timeline should not be rendered with non-Twitter content. e.g. comments, updates from other networks.”

Nearly every aggregating service, including the new Klout “Moments” feature displays feeds from multiple sources.  According to Twitter, “If your application displays Tweets to users, and it doesn’t adhere to our Display Requirements, we reserve the right to revoke your application key.” In other words, developers will have far less ability to create unique experiences around content pulled from Twitter.

This represents a dramatic land-grab by Twitter, who wants to control the market for consumer-oriented Twitter clients and syndication. Twitter wants to own the Twitter stream — wherever it is.

At a minimum, these new guidelines are going to throw the Twitterverse into turmoil and it may cripple what used to be a thriving developer ecosystem.

I am not somebody who is walking the halls of Twitter, and I don’t know the inside view of Twitter’s long-term monetization schemes, but it seems that Twitter might learn a lesson from Apple. Apple’s dominance is not just because they make great products. They also have an enormous application eco-system that was developed not by Apple, but by thousands of innovators everywhere. This open market approach drove breath-taking and rapid innovation and Apple figured out a way to take their cut, too.

It appears that with this move Twitter is saying that THEY want to control the app development.  This seems like a short-sighted and risky move. Yes, they control the mother lode of information but I would suggest that anything that destroys the vibrant innovation around your product is probably a bad thing.

I love you Twitter, but isn’t there another way to monetize other than killing a thousand small companies after they have been working with you for years?

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