I've long said that creating Twitter clients is a lot of work for a very short market window because Twitter itself will eventually get into that business. And other Twitter related businesses too.

That's what seems to be happening. MG Siegler spotted this Tweet from a Twitter software engineer:

"If you had some of the nifty site features that we Twitter employees have, you might not want to use a desktop client. (You will soon.)"

Sure, Twitter client developers might be able to keep a step or two ahead of Twitter, they might be a little more nimble but eventually Twitter will catchup.

Some users of Twitter clients might not want the switching costs -- it might be difficult to transfer some of their favorite lists, or other things such as the look and feel of their favorite Twitter client. But that would be a fairly small group of users out of the total number of users in the future Twitterverse -- probably not enough to build a sustainable business.

Henry Blodgett sums it up well:

...it's the difference between Google Sites revenue (Google.com), in which Google keeps 100% of the money and Google Network revenue, in which Google has to hand over 50%-80% of the money to a distribution partner.

Foremski's Take: If I were Twitter I wouldn't rush into swallowing everything up too soon -- it's good to have third-party developers testing out markets and also evangelizing those markets -- then you can step in and suck those business ideas into your black hole. Unless, that is, that third-party developers get wise and decide not to do your dirty work for you.

A better tactic would be to buy some of those third-party developers instead of pushing them out of the way.

That will encourage other developers to be creative and to do the hard work for you, in the hopes that you might buy them.