Twitter — the tech-elite-popular SMS-like micro-publishing/messaging service, if you didn’t know — this week announced $10 million in funding, including an investment from Amazon founder Jeff Bezos.

The Bezos addition is interesting because if anyone knows how to scale an online business it’s Amazon — and Twitter definitely needs help scaling because despite (or probably more likely because of) its popularity the service has suffered repeated downtime.

In announcing the investment, the Twitter blog proclaimed the service’s goal was not to come up with a business model (at least not yet) but rather to establish itself as “a global communications utility.”

At its core, Twitter is SMS-for-large-groups. If with SMS you send a personal message to one person, with Twitter you send a not-so-personal message to everybody “following” you — for some super-users, that’s thousands of followers at a time. The result is a kind of highly-distributed “town-crier” effect in which news and new ideas spread very quickly across the Twitter-sphere.

As a would-be “communications utility” and a clear cousin to the extremely lucrative SMS, Twitter would seem to hold appeal to service providers. But without a business model in sight, can carriers really be bothered with Twitter? The clear answer seems no.

And that’s too bad, because Twitter could use a dose of “five-nines” religion right now if it’s ever to make it pass the early adopter phase and into the mainstream. As the telco industry knows, the SMS explosion came with its own growing pains.

The biggest difference, however, is that even as SMS was growing (and struggling to grow) carriers were able to track — and bill — on per-SMS-message basis while Twitter continues to search for a way to turn Tweets into revenue.

Image by Getty Images via DaylifeMicrosoft’s long pursuit of Yahoo ended this week with Yahoo opting instead for a search advertising deal with Google.

I’ve been watching this dance for a quite a while, and a few things have become clear to me:

• Google owns online advertising. Between its search/mobile text ad business and banner business with DoubleClick, the game’s pretty much over. Now, businesses can go to Google and get their ads placed on Yahoo as well. For telcos, that means getting into bed with Google as well on advertising.
• Yahoo will likely slide into irrelevance, in large part because execs are seemingly headed to the door after shares plummeted to $22 today (down from Microsoft’s likely $33-plus bid).
• Yahoo’s slide is unfortunate, because it has some market-leading registration-based services, including mail, Flickr, Delicious, etc. Some service providers still have portal deals in place with Yahoo; these should be re-evaluated.
• Microsoft may have struck out with Yahoo but I think they should turn their full attention to the carrier market. It just makes too much sense. They are already partnering with service providers on IPTV, MediaRoom, ConnectedServices, etc. And cutting sweetheart deals with wireless providers around WindowsMobile would be a good way to ensure that Google (with Android) and Apple (with iPhone, and a likely long-term Google partner) don’t sew up the mobile space as well.In fact, Microsoft (MediaRoom plus Xbox plus Zune (yes Zune) plus Windows Mobile) partnered with carrier Quad Play offerings would be a perfect package to go after mainstream consumers – let Google and Apple win the early adopters (and monetize them largely via advertising. MS+telcos can chase massive ARPU (and real subscription revenue) with their joint offerings.

I think a Microsoft – telco matchup (and subsequent service mashups) is an intriguing combo.

Image via WikipediaThe iPhone is an impressive device. But….

After almost a year of strong sales that have made it one of the dominant smartphones in the United States, the iPhone has settled down to a less-than-spectacular pace: roughly 600,000 units a month, according to the company….Nokia, the world’s largest maker of cellphones, sells more phones every week than Apple has sold since the iPhone’s introduction.

That from the NY Times this morning in a story guessing on the specs for the upcoming iPhone 2.0: more phones per week than Apple has sold altogether…

Obviously, there are major lessons to be learned there for service providers. It’s great to be a part of the bleeding edge (AT&T seems happy with its Apple iPhone relationship, though the terms were clearly a bit risky). But early adopters are clearly NOT the mass market.

The same dynamic is playing out in the Web 2.0 sector. There is tremendous discussion about Web 2.0 services like Twitter and Friendfeed among tech early adopters. But chances are * you * don’t use either service nor do any of your friends. Such services may leap the chasm to the masses, but they might not. Dare Obasanjo, a blogger and coder working on Microsoft’s Web properties, notes THREE major Web 2.0 trends from last year — blog search, social bookmarking and RSS readers — that failed to make the big leap to the mass market.

Can telcos afford to ignore the opportunity and competitive impact of ahead-of-the-curve services like micro-blogging, high-end smartphones and lifestreaming Web aggregators?

No.

But they’ll do well to understand that a cool trend does not necessarily mean there’s a business to be had, nor does a neat feature mean there’s a money-making service ready to be launched.

Ignore early adopters at your own peril; but miss — or mis-time — the leap to the mass market and you are likely in even more trouble.

- We’ve written about free (ad-supported) VoIP calling previously (When Calls Equal Impressions), but in recent days we’ve seen free SMS from Jaxtr, free 411 from from freeMobile411 (and Sprint!), free music from Nokia/Sony BMG (with EMI coming soon) and not free but unlimited, cheap international calling from Skype, which makes incremental calling essentially free. May we recommend some reading for service providers: Free! Why $0.00 is the Future of Business, by Long Tail author Chris Anderson.

- Former Googlers are building Mechanical Zoo, a new search engine that takes into account social network data to help deliver better results. Early, but worth watching. Service providers should be positioning themselves to feed information only they have — such as identity, location and billing relationships — into such services, taking a sizable piece of the action for their trouble.

- Google is reworking its iGoogle customizable start page to look and feel more like a social network. Fueling the effort is a new iGoogle developer “sandbox” to speed the delivery of new apps/capabilities to iGoogle. Owning a user’s start page is big business, and one ISPs/telcos are already in, often via partnerships. Back in January (according to ComScore stats via TechCrunch) Yahoo owned 58% of user start pages with Google at 26% and Microsoft at 10%. Meanwhile, smaller start page vendors like Pageflakes are getting bought up. The start page land wars are heating up, there are advertising, upsell/cross-sell value added services and other revenues at stake.

- Um, about Google and its ad/recession problems? Never mind (NYTimes: Google Defies the Economy and Shows Profit Surge). Truth is, whole scenario (Company stock slides, bad news appears, guidance goes south, actual earnings beat lowered guidance, stock pops back up, is right out of the big tech company (Microsoft) earnings management playbook).

- Apparently Microsoft is showing Windows Mobile 7 — designed to catch up to the Apple iPhone — to at a Windows MVP developer summit this week. Blog MSMobile.com has some conjencture about the availability of WM7: “announcement in February 2009 at Mobile World Contress and sales of first devices in late summer 2009.) That’s a long way off to compete with the iPhone, though Microsoft did announce Windows Mobile 6.1 earlier this month. 

- The FCC’s second P2P traffic shaping hear was held yesterday, too much less coverage and fanfare. On this “home court,” Stanford Law Professor Lawrence Lessig pounced on net neutrality issues while FCC commissioners seemingly played both sides of the fence calling with some calling for P2P oversight and others worrying about regulatory burdens.

- Nokia is apparently paying one label (Universal) $35 per year per user in order to deliver its all-you-can-eat “Comes With Music” service. The Hollywood Reporter does the math:

Nokia last year sold 437 million phones and could sell around a half-billion this year. If, say, 1% of 500 million phones carry the Universal tie-in, that’s $175 million in Universal’s pocket. If it’s 10%, Universal walks home with $1.75 billion.

Are service providers ready to pony up that kind of cash? Better be ready to at least check out this kind of deal or watch a handset maker turn the iTunes-applecart on its head without you. This as Verizon and AT&T execs used the NAB show to talk up closer relationships with broadcasters.

- Comcast feels the pain of ticking off one of the world’s most popular bloggers, Dave Winer. What I found most interesting: 1) with PowerBoost, he was getting 28 Mb/s download! 2) they cut off his service because he was consuming too much bandwidth; fair enough, but they told him after the fact 3) a few years ago, Winer said he wrote about a bad Travelocity review that ended up being the number 1 Google hit for the brand (uh oh!) 4) Comcast apparently has an employee (Frank) monitoring Tweeter for complaints (under the name Comcast Cares).

Bottom line: service providers separate themselves from Web competitors by actually providing customer service (especially via phone); irony is that customers are using the Web to keep customer service in check.

- The FCC is holding its second public meeting on P2P traffic shaping at Stanford University (PDF) later this afternoon. You can listen to it streaming here. We’ll file a report later this afternoon. Note: no service providers on the panels, not even Comcast, which makes it hard to take this too seriously as anything more than a gripe session.

- Truphone, which we covered in our New Service provider feature, landed $33 million series B financing, which they’ll using to build out their network (yes, the run at least part of their own backbone while leasing key portions) and, according to what Truphone’s James Body told me at VON, to make a rather significant retail push. Are consumers ready to buy a Truphone at Best Buy? Might be a tough sell sitting next to all those shiny smartphones they stock these days.

Here’s some interesting details on Truphone’s backbone from their funding press release:

The company has developed a carrier-grade, global operator infrastructure including a global network of SIP gateways, a Nokia Siemens Networks mobile network Home Location Register (HLR) and a GSM identifier.  The infrastructure is capable of supporting 40 million customers worldwide. This is all enabled by a series of global agreements with PSTN (Public Switched Telephone Network) and SIP (Session Initiation Protocol) providers.

Column for latest print issue of Telephony. I’ve come to realize these two worlds will stay separate even as they intersect. Does that make sense?

Read the column: The Web is the Web and Telecom is Telecom

I talked with Jaxtr CEO Konstantin Guericke — most famous as LinkedIn co-founder — about new SMS plans…I think they have the right idea about service/ad mix, I’ve just have never met anyone that’s actually a Jaxtr user. Those 10 million members must be somewhere ; >

Go to: Jaxtr Adds Free SMS to Telco-Busting Mix

- Henry Blodget (who didn’t fare too well in Bubble 1.0 but is covering Web/Bubble 2.0 at Silicon Valley Insider) has been chronicling Google’s declining search clicks for three months now, almost as a lone voice in the wilderness. Today, he notes March paid-click growth is as bad as the past several months — just plus 2.7%. Either Google is a proof-point for the expected ad recession or something is wrong (Google itself has said it is trying to stamp out fraud and improve click accuracy for advertisers). Whichever, Google stock is at 451 down from year-high of almost 750.

- There’s an interesting debate going on in the Web world as Facebook sucks in features from high-novelty competitors like FriendFeed and Twitter: will popular new Web services exist as standalone businesses (ie, maintain growth, find revenue) ore will they get sucked into other services as *features*? This is a debate worth noting for telcos. Microsoft and now large Web players like Google/MySpace/Facebook are proving that you don’t need to invent new services to benefit from them — you simply embrace/extend them to your own LARGE, mass market customer base. Can service providers do the same with Web 2.0/telephony 2.0 services? They’ll never be as good at it as Microsoft, which built its business from Windows 1.0 from “mainstreaming” others products, but it’s a tactic that must be built into the playbook.

- Jailbroken iPhones are getting VoIP apps, starting this week with Fring. More coverage here and here.

- Comcast wants a “P2P Bill of Rights and Responsiblities,” apparently written *by* service providers *for* their users. PR effort gone awry, let us count the ways: appending “bill of rights” with “responsibilities” (somehow the founding fathers didn’t go that route); thinking users want vendors to “grant them” rights; predictable negative user reaction (they asked for it). The conventional PR wisdom now is for companies to be “part of the conversation” in an “authentic” fashion — this ain’t it.

- If you like code and want to go deep, definitely read this post by Dan York of Voxeo on how he used Google AppEngine to quickly build a voice-driven application. The app involves dynamic generation of a VoiceXML app using python and Google’s AppEngine SDK, running on Amazon’s EC2 cloud computing environment with a phone interface provided by Voxeo Evolution. Check it out — it’s the future, you know ; >

I have no one to blame but myself. Yesterday, I lightly (I thought) poked fun at Google’s telephony ambitions, in light of Grand Central’s several-hour outage this weekend. How could Google play in telephony if they didn’t adhere to the rock-solid, five-nines reliability the phone network is known for? Separately, just days earlier, I’d crowed: The Web is the Web and Telecom is Telecom.

This morning, my DSL connection — out of nowhere, I was working away happily — went dead. A remote line test and AT&T tech call later, I found out the scary truth: my DSL modem was cooked. Dead. Out of commission.

I guess that’s what I get for messing with the Google Gods (Larry, Sergey and Eric … maybe, given this, I should throw in Marissa too … I’ve got enough bad Google karma as it is…)

I’ve had DSL in my current location since 2003, with nary a problem.

This is not a joke. Nor is it link bait (well maybe a little). For eighty bucks I could have just bought some traffic (using Google AdSense of course).

See my dead modem sadly resting on my shiny new DSL box. Check out the Best Buy receipt for further proof.

Sad to say, it wasn’t just AT&T (my DSL provider) making me eat crow today. When I made the run to my local Best Buy for the new modem, I noticed a Verizon retail store on the way. I’ve got a corporate-issue Windows-based Treo, with Verizon’s very nice high-speed data service. I figured I’d stop in and pick up a laptop tether cord as a back-up for any future outages (or just for travel).

The Verizon store was large and beautiful (if a bit empty at lunch-time). Three sales reps converged on me. I told them I was looking for a modem tether cord. Their answer: we don’t carry that here.

But I could order it: online.