Twitter seems to be doing fine, to me. It's a unique and focused service. Digg was doing fine as well until they released a site makeover that completely ignored why their community was interested in the site. Twitter's recent improvements were well received, in contrast.

You've actually of that opinion about Facebook, but meanwhile, large numbers of people never cease to predict that Facebook will soon control the entire universe. So, opinions vary.

They're extremely different though. Facebook has a good, proven business model. They kept control - people generally go to facebook.com.

However, twitter gave away control to 3rd party clients. Only a tiny number of twitter action comes from twitter.com.

When most of your userbase uses 3rd party clients, you have very few monetization options.

I don't know about that. Among the early adopter crowd, it is certainly true, but Twitter much larger than that group now. Most people use Twitter from the web or from an official Twitter app. I still think Twitter is going to have very serious monetization problems, but third party clients aren't really a problem. If anything, the third parties should be concerned about hitching their wagon to a company that might not be too concerned about their success.

Reference: http://blog.twitter.com/2010/09/evolving-ecosystem.html

Quite true, it's not fun at all to develop software or a business based on a platform and service that might change to make your business obsolete at anytime.

Fred Wilson, an investor in Twitter, made a post when the article you linked to came out, stating how fantastic he thought it was that Twitter was screwing over their third party developers. A shift from 'filling in the gaps' to 'building on the platform', he thinks. This doesn't make me comfortable as I depend on a couple of other companies he is involved with.

That's about whether Twitter will make a lot of money, though. The 'digg' issue is not that digg failed to monetize, but that users abandoned it in droves and it seems irrelevant, isn't it?

Twitter could always restrict their API, too, to discourage or make some third party tools obsolete. This would only be accepted if they made their own available with applications similar features and quality.

On Digg, you had at least real persons signing up and some type of community. Twitter users are marketing people or self loving/promoting people. No normal person would sign up because there is simply no use to it. In 2-3 years, twitter will be dead.

I suppose you hadn't read Digg very often in 2008-2009. It mainly consisted of marketer-promoted stories, and kids posting ASCII Picards and one line, monosyllabic comments in response to these stories. The sense of community was much lower than on sites like Reddit.

Twitter is actually doing a great job of blocking spam - I used to get a few spam followers a week, now it's rare.

I follow a lot of programmers and project leaders on Twitter and your analysis, as well as the one above, are dead wrong. I constantly hear about news and see good links on twitter hours or days before they show up on places like HN or Reddit.