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Yes.
yes, and I was quite amazed at how well marketed it is.

The girl who is responsible for such viral ninjitsu memes as "I heard it on twitter first that a plane landed in the hudson.. safely" makes Seth Godin look like an agorophobic dislexik.

For us, definitely. For the media, a necessity.
This came up in a poker game yesterday. I pointed out to someone who thought Twitter peaked: - They grew close to 100% last month - I've gotten more business contacts over twitter than LinkedIn & Facebook combined - Twitter is much more conversational than Facebook when between strangers. That makes the business & celeb side of it stronger.

I expect Facebook to do more to let companies better engage with their users. One problem is the privacy. Facebook conversations are largely hidden from the public eye. How will my wall-to-wall comment about shitty Comcast service get picked up by them?

I do think the celeb hype around twitter is just insane. Multiple talk show hosts spend a lot of time begging people to sign up. You really can't pay for that kind of PR.

What has got me to (occasionally) use twitter is interacting with celebrities. I had a small interaction with one of my favorite rappers which is neat. And if you ever want a 140 character response from Craig Newmark, send him a tweet, the man is a machine, he answers absolutely every single message. And if you say "craigslist" without directing it to him he'll still probably say something.
It seems like one of the things that exist when a medium is young and there aren't that many people using it. There were probably some celebs you could email in 1990 (or IM in 1997) and have them reply. I doubt this will last if Twitter grows much.
There is definitely a problem in scaling this kind of application. Many people run into it when they start following more than, say, 400 people.
I think it could last. I wouldn't expect celebs to answer every message, but there's something inherently appealing to the 140 character limit that makes it feel more manageable.
Twitter is great when used for its intended purpose (bitching, ego inflation, finding parties at SXSW). Many of the newer use cases - marketing over Twitter, customer support over Twitter, payments over Twitter, technical debate over Twitter, IP over Twitter, etc. - appear very cumbersome and inefficient compared to the old ways.

We have been here before. I remember a company in 2001 that built some sort of business app that routed all its traffic over the public Gnutella network - just because. When I see people doing something over Twitter just because, that's overhyped.

very cumbersome and inefficient compared to the old ways

Okay, I'll bite on some of this.

marketing over Twitter

Compared to email marketing? For which I cannot enforce opt-in? Which deluges me in content that I don't necessarily have time to read? Shall I even bother comparing it to telemarketing -- is there any question what will win that comparison? Advantage: Twitter.

customer support over Twitter

I've never heard of one-to-one customer support over Twitter. Surely email is better, except when the spam filters intervene. For FAQs there are wikis and forums and good old web pages and new-fangled ticket tracking sites.

But what about generic, time-sensitive or high-priority hints, suitable for a sizeable fraction of the userbase? "Sorry for the outage; we are working on it." "Everyone should know that there's a security bug that has just been fixed." "Today 50 people have asked about Feature X. It's right there in the Bookmarks menu. Read the updated FAQ." These are the kinds of messages that aren't a good fit for bulk email. There's never really been a good venue for them before. [1] Twitter is going to spawn a lot more of them.

I'm not sure about payments over Twitter, but I know better than to laugh: I remember when PayPal was hilariously funny.

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[1] Okay, RSS feeds. But Twitter is, among other things, an RSS feed that non-technical humans can understand. And that is constrained to be blessedly short. And there are other semantic and social differences.

Actually, I've had some really good one-on-one customer support experiences via Twitter. I don't need hand holding, but sometimes it's just nice to get pointed to the right url for what I'm looking for without having to craft the perfect Google query. Twitter is great for that - just fire off the quick question, get a reply pointing to more detailed instructions. I don't know if it's scalable, but it's worked when I've needed it.
Relative to an RSS subscription, a Twitter follow is "low cost". Many people will subscribe to a Twitter feed, in part because of it's conciseness, who would otherwise not subscribe to an RSS feed. We've found that really effective in keeping interested parties in the loop for what's coming down the pipe from our end.
IP over twitter... interesting. Maybe we can now test a RFC1149 implementations and deployment virtually, rather than having to maintain our own coup.
Q: What's the difference between Twitter and setting your status on a XMPP client? A: XMPP scales.
A: XMPP doesn't keep a public log of your status updates.
I can use the word Twitter around a non-programmer and they understand what I'm saying? Twitter persists messages? Twitter is public? The Twitter API is drop-dead simple? Twitter popularized asymmetrical following?
When did Evan become 'Ev'?
The same way you are "rrival".
>I question what’s the point? It solves a question that nobody asked, and feeds the narcissism that pervades our culture.

The question contains its own answer, partially. I can see wanting lighter blogging tools, but what I don't quite get is why so many people want something limited to such short messages. Does the majority of the population want all conversation reduced to soundbite-sized posts? What am I missing here?

It's been said that the enforced brevity is somehow liberating. You can't be eloquent in 140 characters, so you don't need to stress so much about trying to be. Same can be said for texting.
I sometimes wonder if the sky is blue.
From the article -- "or accept a fair market valuation to be acquired and become a part of something that’s more interesting." The problem is that as a feature it's worthless. It can be recreated relatively simply. It has no value beyond the network effect, and it's been demonstrated a bunch of times that the network effect doesn't follow acquisitions (dodgeball anyone? jaiku ftw?). That is the unsolved problem - not how to build a community, but how to monetize one. I think that facebook (at least until they decided to ripoff twitter) was the closest to solving that problem.
There's no doubt it's overhyped, but there's also no doubt that, rightly or not, it's making a huge impact. In fact, I think it's a fascinating case study in how the most horribly implemented and feature deprived technologies are sometimes the most successful.

IMHO, the one and only thing they did right, and which made all the difference, was to implement SMS as a gateway. This made it possible for everyone to use twitter before actual twitter clients existed. And ironically this in turn forced them to make the service completely feature deprived - bizarrely short length, no links, no images, no formatting in messages ...

If someone had proposed it to me I would have immediately said they needed a richer client - how could they start so far behind what everyone already expected from a simple IM client? Well, I think it was exactly that which actually drove the success of the whole thing.

Twitter's killer product is search..

Google you search websites. Twitter you search conversations.

More ppl have conversations then have a website! The hype is accurate as it will prove very complimentary to Google or become a Google killer. The crowd is rarely wrong; if it was Google wouldn't be what it is today!

Twitter went a long while with the "web crowd" being bombarded with it but there was no mainstream acceptance. Then within the last month or so, somewhere around the senators using it during the State of the Union, light night comedy, news networks, even the radio program I listen to in the mornings can't stop talking about it.

Personally, I still don't see the point and I'm a little irritated at Facebook for implementing a Twitter-like interface core.