I've felt for a long time that Twitter should have welcomed federation early-on, when the competition wasn't so fierce. While it wasn't a slam-dunk, I thought there was a decent chance our Twitter log-ins could be the default username for many other sites on the net. Now Facebook is making a strong bid to be that, and if Twitter were to try that now it would likely be seen as too-little-too-late.
Then my friend, who asked not to be named, wondered why WordPress isn't in the same place as Twitter. I answered with an analogy -- Twitter is riding a bicycle on Interstate 95, and Facebook and Google are two semis about to have a head-on collision. Twitter may not be directly competing with either of them, and Google probably doesn't care much about Twitter one way or another, but the collision is going to do some serious damage to all who are in the vicinity. WordPress isn't riding a bike and they are nowhere near the freeway. Picture Matt sitting on the beach sipping a Mai Tai.
1. I don't mind hosting sites on wordpress.com because I know if I ever want to get them off I can run them on my own server. I need to be able to do that with Twitter (or Tumblr for that matter). In other words, there must be an open source, easily installable Twitter that's the same thing that twitter.com is running, so I can just move my presence there and not skip a beat. People are going to say I can do that with Identi.ca, but I can't -- when I move my WordPress blog my domain points to the new location and all my links still work. To really trust Twitter, they have to enable competition at this level.
2. I must be able to completely control the look and feel of my presence. This is something Matt & Company could do much better too, but Twitter hardly does it at all. This is something Ev should understand, as one of the early blogging tool vendors, he should remember how important a role designers played in the evolution of blogging. Given that Twitter and the other services in this space (e.g. Facebook) don't allow the user any control over the HTML of their presence, it should be easy to improve this. But I want power over everything. More important, I want designers to have power over everything so I can use the product of their work.
So in summary: I need to be able to isntall my own Twitter and move my presence to my own server, easily. And I need control over the look and feel of my site. Those two things would do enough to shake up the market and give Twitter a new way forward and make what Facebook and Google do in their battle-of-the-titans-to-death mostly irrlevant to them.