The partnership, which comes a year after a similar deal between Flipboard and the New York Times, will grant full access to FT subscribers while casual visitors will be able to read a smattering of FT blog posts and cultural stories.

Rob Grimshaw, managing director of the FT.com, said by phone that the deal will involve the FT and Flipboard sharing advertising revenue, but would not disclose what the exact revenue split is. In the past, the ad splits have been a source of contention for some publishers, including Condé Nast, which pulled back its advertisements from titles like New Yorker and Wired. (A Flipboard spokesperson said the company has an “excellent relationship” with Conde and is partnering on ads for six other titles).

Grimshaw also said that the FT is exploring selling subscriptions through Flipboard, and would be willing to share some of the proceeds with the platform. This is significant because the FT made waves by leaving iTunes in part due to the 30 percent commission (or “vig,” as the Brits call it) that Apple takes from every publisher.

So why is the FT willing to partner up with Flipboard so soon after leaving Apple? Grimshaw says the difference lies in how the two platforms treat customer relationships.

“The issue is not so much a percentage, it’s the relationship between publisher and audience. Paying a 30 percent finder’s fee is okay. Paying 30 percent in perpetuity and not knowing who the customer is not okay.”

The Flipboard partnership also reflects the fact that the FT and other publishers are keen to get their stories in as many places as possible at a time when readers are consuming more and more content on mobile. As for the future role of Flipboard, which some describe as a “giant iceberg” in the way of publishers, Grimshaw had this to say:

“I think the really interesting aspect to the platform is the way they’re giving readers the ability to create a bespoke user experience. I personally think this is going to be a strong strand in publishing and consumption of news in the digital space.”

Correction: This article was updated at 2:40pm to state that Conde Nast titles had pulled ads from certain titles; Conde did not, as previously stated, break off the relationship.

In case you missed it, here’s Flipboard’s explanation and demonstration of its new capabilities:

It’s not if, but when

Now don’t get me wrong, Flipboard is no Facebook. Its 50 million-ish user base isn’t particularly active  (though I estimate only around 4 million are active, based on ratios from previous public statements). Not yet, anyway. And thank God, or the media/publishing industry would likely have a significant crisis on its hands, as opposed to one that’s somewhat in the distance still.

The reality the publishing needs to understand, though, is that Flipboard has (smartly) maneuvered itself into a powerful position. With the flick of a switch, it could deal a serious blow not only to the traditional old media but also to a variety of digital platforms – Tumblr, Flickr, WordPress, among others – as it pivots from purely curation-based interaction to one that offers users full-blown creation abilities. Indeed, this is likely its only future, since without the agreement of the major content creators, Flipboard would be little more than a collection of Tweets and blog posts.

It’s about money

Currently the ad model Flipboard is using is fine, but it’s fair to say it’s not setting anyone’s world on fire. That could change in a heartbeat, though, if the magazines Regular Joes create take off and real readerships are built. Could the next powerhouse of media come from a bedroom in Delaware?

It’s safe to assume then that the company is actively exploring revenue paths behind closed doors right now: micropayments, revenue-share or even subscriptions. Imagine consumers subscribing to read other consumer-curated magazines, or locking down content only to be opened like mag apps are now, or as in-app purchases per gaming, or even geo-location apps (Grindr). At the end of the day, though, it’s crucial to note that Flipboard has what no other publisher does: love from Apple, and quite possibly the credit card numbers that go with that love.

It’s about attention

Bless anyone in the media for not believing that this move hasn’t just made their job far harder. A reminder: You’ve just received yet another huge set of competitors vying for the same eyeballs you covet. If history is anything to go by, most people already feel quite satisfied parsing news (á la Google News) so this shift should be sending chills of terror through professional curators like editors and writers. After all, going big is likely only a creative ad campaign away for Flipboard.

Another major feature that news reports of Flipboard’s update typically neglected to mention is the bookmarklet capability. The idea is that readers don’t even have to be on Flipboard to still add content, from anywhere on the web. Awesome for users, existentially terrifying (and awesome) for the media.

Content creation is coming

So what to do? True, full-featured content creation capabilities are doubtless coming to Flipboard. How aggressive Flipboard moves in that area will be interesting, as the company obviously has to be careful about biting the hand that feeds it. (In fact several publishers have already pulled back from the partnerships, choosing instead to focus on their own apps). The only way for publishers and the media to fight back then will be to remove articles from the system, or cut a deal. However, I have said it before and I’ll say it again: No paywall will ever be truly successful unless all the competition is paywalled, too.

Either way, we have a glimpse of a possible future and it’s both beautiful and terrifying. For those unconvinced of the power and implications of what I’m talking about, take a minute to check out the custom @themediaisdying magazine that I cobbled together in precisely 33 seconds and you’ll see what I mean. Now imagine what happens when tens of millions of people start doing the same.

Paul Armstrong is owner of Digital Orange Consulting; follow him at www.paularmstrong.net or on Twitter @TheMediaIsDying.

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Photo courtesy Ri han/Shutterstock.com.

As we tried to point out in our post, Flipboard’s new version is more than just an evolution, it’s a significant departure from what the service was all about. Until now, it has been about making it easy to discover and consume content from multiple sources, but the new features are all about turning readers into publishers — by giving them curation tools like those used by Flipboard’s own editors.

When advertisers become publishers

Flipboard’s move may seem like an obvious step, and one which combines some of the appeal of services like Pinterest or Tumblr. But depending on how Flipboard decides to proceed with these features, they could be very disruptive indeed. Here’s a couple of ways they could do that:

1) Advertising: Flipboard’s curation and publishing tools are not just for individual users, but corporations, existing publishers and brands — and one overlooked element of the launch is that Flipboard is building e-commerce functionality into the app. Chief technology officer Eric Feng said some advertisers are already creating their own magazines using both their own ads and content from other sources. Those magazines could then be selected and highlighted by Flipboard’s algorithms just like any other effort by a Flipboard user.

We’ve written a lot about the phenomenon of “native” advertising (and will be talking more about it at our paidContent Live conference on April 17 in New York) as well as related concepts like sponsored content and what some call “brand journalism.” The idea is that brands and advertisers now have all of the same tools that traditional publishers used to have a monopoly on — that is, the ability to create and distribute interesting content and reach audiences directly. If a brand can curate content itself, and have its own ads with e-commerce features built in, why does it need a traditional magazine?

Revenue sharing with curators

2) Revenue: Flipboard already has some partnerships with media companies in which it gets to use more of their content directly in the app (instead of showing just short excerpts and then a “web view” in a browser) in return for a share of advertising revenue. When I asked Eric Feng whether Flipboard might consider doing a revenue share with individual users if they create compelling magazines from curated content, he said “that is something we are thinking about doing at some point in the future.” That’s not a promise, but it’s still an interesting idea, and potentially very disruptive in a number of ways.

If Flipboard provides the content and the tools, and the users who curate that content are generating a lot of value in terms of pageviews or “likes,” or whatever metric you want to use, shouldn’t those users get some benefit? Where this gets problematic is how Flipboard decides who gets what share of the revenue. If the ads come from a traditional media outlet, do they get the largest share or does Flipboard? And if media companies don’t want to play ball, does Flipboard just monetize their content anyway, the way Huffington Post and other aggregators do?

The idea that advertisers now have many of the same tools as publishers and traditional media companies do, and that readers and consumers of content also have much more power over that content than they used to, are two pretty inescapable facts about the new media landscape — and Flipboard has just staked a claim to some significant territory on both of those fronts.

Post and thumbnail image courtesy of Shutterstock / JJ Studio and Shutterstock / Eldorado3D

Chief technology officer Eric Feng said in an interview prior to the launch of the new version that this is much more than just an evolution of Flipboard — it’s a major push into a whole new area, namely curation and publishing of content by individual users. “It’s one of the most ambitious efforts we have ever undertaken,” said the former CTO of Hulu. “It’s been more than 18 months since the inception of the idea, so this is a pretty big deal for us. We were originally focused on discovery and filtering of content, but now we are moving into curation in a big way.”

Flipboard has always had curated topics such as technology and sports, where the service uses a combination of human editors and algorithms — based on frequency of sharing and other metrics — to highlight specific content. In effect, the new tools allow any Flipboard user to take on the same role as an editor and create their own magazine around a topic, and share it with other users.

Reader magazines get promoted in Flipboard

In a nutshell, users with the new features (which are available only for iPhone and iPad currently, but will appear in an Android version soon, according to the company) can simply click a “plus” sign next to a blog post or article they are reading — as well as any video or audio content that appears in their stream — and add that piece of content or “flip it into” to a magazine, which will then be available to them or any other user who searches for that topic.

And Flipboard isn’t just giving users that ability within the app: the service is also launching a bookmarklet that will allow users to pull in content from anywhere on the web — whether it’s a blog post, a news website or Twitter and Facebook — and add it to their custom-created magazine. In a sense, Flipboard is trying to capitalize on the same curatorial impulse that makes people create collections about specific topics on Pinterest or re-blog photos on Tumblr, and in many ways this move is a shot across the bow of those other services.

It’s also clearly a threat to the existing publishing industry, since a Flipboard user can now create their own custom publication using the content that comes from dozens of different magazines, blogs, websites and other sources. So Flipboard is trying to bring publishers in as well and get them to create their own custom magazines — such as a magazine about the Beatles created with archival content from Rolling Stone. It has even built e-commerce functionality into the app so users can click and buy directly from within an article or ad.

But the most subversive aspect of the new features from a media-industry point of view is that they can be used by anyone — including advertisers. If an advertiser can create their own magazine by pulling in their own editorial content as well as content from other sources, and build e-commerce functionality into it, then it gives new meaning to the idea of brands as publishers and media entities.

Bringing users into the editorial process

The new version of the app will have a section called “By Our Readers” in the table of contents, which will include a mix of magazines that have been created by users on a variety of topics — a small group of beta testers (including GigaOM) have had access to this function for several months. As with the other Flipboard sections, some of the magazines that are highlighted will be chosen based on the number of times they have been shared, and others will be chosen by editors.

Like most news-aggregation and recommendation apps such as Pulse and Zite (which is owned by CNN), Flipboard users have always had the ability to share specific stories or items, but the new magazine-creation features effectively allow a user to spend some time creating a collection of content they can then share all at once. Feng used the example of an editor who is getting married soon and created an entire magazine with content about weddings.

In a way, the new version of the app also picks up where Google Reader and other RSS services left off. Instead of just passively consuming text and photos in a chronological timeline or series of folders, Flipboard turns everything into part of a magazine-style experience. According to Feng, many users have already imported their Google Reader feeds into the app, and those feeds will be available once Google sunsets the service in July.

Instead, Google’s making the choice for me: As of July 1, Google Reader will be no more. “While the product has a loyal following, over the years usage has declined,” the company wrote on its blog. I’d bet that journalists are among the most loyal followers of all, and this morning we are a very unhappy bunch. “Google Reader” is the number-one trending topic on Twitter right now.

Haven't heard that many people swear in our office in a long time.—
Janko Roettgers (@jank0) March 14, 2013

The loss of Google Reader could change the way a lot of web journalists, like me, do our jobs. Here are some of the reasons we love the service — and why there’s an opportunity for other companies to step up and serve us (assuming we’re not somehow able to convince Google to keep Reader alive…we’ll even pay for it!).

I use Google Reader more than any single web site or app save Gmail. I’ll really, really miss it—
Ezra Klein (@ezraklein) March 14, 2013

Twitter isn’t a substitute for RSS…

The best thing about Google Reader, from my point of view, is that it allows me to scan a lot of information quickly, with the assurance that I’m not missing anything. That’s why, for me, it fills a completely different role than the (equally useful) Twitter does. Twitter provides a snapshot of a moment in time, and you’re likely to miss tweets as they whiz by; Google Reader stores everything. The search on Google Reader is also vastly better than the search on Twitter, and it goes back indefinitely.

@glecharles Twitter is real-time for me and RSS is asynchronous–there's no way one could replace the other.—
Nancy Foasberg (@nfoasberg) March 14, 2013

…and neither is Flipboard

Services like Flipboard are great if you want to see the most popular stories on a given topic. But as someone who really geeks out digital book publishing, I don’t just want to see the stories that an aggregator recommends for me because they’ve reached a critical mass. I want to keep up with the little blogs, the niche blogs that rarely surface but that do occasionally pick up on some story or emerging trend that I would simply have never learned about otherwise. Google Reader helps me keep track of what’s going on at the roots of my beat. I choose the sources I’ll follow there, and I know that I won’t miss out on one of their stories. I trust Flipboard (kind of) to link me to some big political or tech story, but I don’t trust it to “discover” the nitty-gritty stuff for me, and for good reason: It doesn’t.

Google Reader impact also undercounted if you strictly look at # users bec many power-curators/sharers use it as a discovery system—
Hunter Walk (@hunterwalk) March 14, 2013

In addition, Flipboard is a lean-back kind of service. I use it when I want to curl up and read. In the mornings when I’m looking for stories, I don’t want to tap through a pretty magazine-like interface on my iPad. I just want to scan headlines and text fast, and I want to do it on my laptop.

So what’s next?

Now that the panic’s subsiding a little bit, it looks as if viable alternatives to Google Reader are going to emerge. In fact, Instapaper’s Marco Arment actually thinks the closure of Reader could be a good thing for people who rely on RSS: “We’ll be forced to fill the hole that Reader will leave behind…We’re finally likely to see substantial innovation and competition in RSS desktop apps and sync platforms for the first time in almost a decade.”

Alternatives are sure to pop up in coming days. Search Engine Marketing Land has a big list here. Digg is apparently working on a Reader-like service. Feedly and Reeder, two apps that integrate with Google Reader, have already promised that they won’t die off just because the service does. “A lot of Google Reader users use their reader as a research/curation tool and need to be able to crunch through a lot of articles very fast,” Feedly wrote on its blog Thursday morning — and explained how customers can use Feedly to do just that. Reeder also tweeted that it’s staying in business, though it hasn’t explained how yet.

Bigger revelation: Google built a service that you configure with all your interests and biases. They couldn’t make it profitable.—
  (@macdrifter) March 14, 2013

“I think that there is still a lot of value a service like Reader could provide — particularly in a world with increasing information overload coming us from many different sources,” Brian Shih, a former Google Reader product manager, writes on Quora. “But Reader at Google was pigeonholed as an RSS-reader explicitly, and didn’t have a chance to grow beyond that to explore that space.” Similarly, Chris Wetherell, an early creator of Google Reader, told Om that the service missed early monetization opportunities that other companies still might be able to tap into.

The good news for journalists and others who rely on Google Reader is that, while Google clearly doesn’t see a business opportunity in the legions of Reader fans, other companies do. And over the next couple of months, they’re going to be competing for our business.

Pulse is one of a number of news-recommendation apps that try to apply algorithms and other filters to suggest content to users — a group that includes Zite (which was acquired by CNN in 2011) as well as News360, Flipboard and Prismatic. Pulse was one of the first to make a big splash, in part because Apple founder Steve Jobs mentioned it on stage during the launch of the original iPad, and also because the New York Times accused the company of copyright infringement for aggregating its content.

Since its launch, Pulse has grown to the point where it has about 20 million users, but it’s still seen by many as a runner-up to Flipboard in the news-recommendation market, so an acquisition in the $100-million range would likely make sense for the company and its backers.

LinkedIn is becoming a media network

For LinkedIn, meanwhile, the purchase of a service that aggregates and recommends content from a wide variety of news sources would be an interesting extension of its recent moves to bulk up the media side of its business. When the company first launched its LinkedIn Today service — which aggregated news based on which links were shared within a user’s network of contacts — it seemed to some (including me) like a side project designed to primarily to drive traffic to the site, which was mostly being used as a place to store a resume or connect with potential employers.

Since then, however, the company has made a number of other efforts on the content side that are more ambitious — directed by former Fortune magazine staffer Dan Roth — such as the launch of the Influencers program, in which the site gets prominent personalities such as Richard Branson and Reid Hoffman to blog about topics of interest to its users. In many ways, this is analogous to what alternative blogging platforms like Medium and Svbtle have been doing (and WordPress seems to be interested in doing as well). (see disclosure)

So what could LinkedIn do with something like Pulse? Peter Kafka of All Things Digital has one idea, based on a video that Dan Roth made for a Fortune app that had LinkedIn integration — so that users could see who they were connected to at a specific company that was mentioned in the news. But while this might be useful to some, it seems a lot less interesting than using it as a kind of extension of LinkedIn Today: in other words, a way of recommending content that would target users based on their interests.

It’s all about the “interest graph”

As we’ve tried to explain a number of times, this kind of “interest graph” targeting is the holy grail for both content companies and social networks. It’s the reason why Facebook is constantly tweaking its news feed, and why Twitter is pouring resources into improving recommendation filters like its Discover tab and other features — and why Google is trying so hard to get people to share and “plus one” more content through its Google+ network.

If there’s one overwhelming reality of the digital age, it’s that we are all to some extent drowning in content from an ever-growing range of sources, and we all spend an increasing amount of time trying to filter out the noise and find the signal. LinkedIn has a large and growing graph of the social-network connections between people based on their work — a graph some believe could make the company an acquisition for someone like Bloomberg — and that could potentially be very valuable for users.

So a LinkedIn-Pulse combination might start as a version of the app that functions almost exactly like the current version, but also tracks content shared by a user’s business-related graph from LinkedIn, and then grows into a larger service incorporated into the site itself. And data from such a service would likely also be very interesting to Pulse partners like the Wall Street Journal, who use the app as a secondary method of distribution and subscription revenue.

And if such a deal does end up happening, of course, a LinkedIn purchase of Pulse would be just another example of a non-media company (i.e. Facebook, Twitter, etc.) establishing a powerful foothold in an area of the business that has traditionally belonged to newspapers and magazines.

Disclosure: Automattic, the developer of WordPress, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Images courtesy of Shutterstock / noporn and Arvind Grover

So who exactly is going to organize the web’s information into a digestible format? That’s still TBD. Flipboard and Zite and Prismatic are just a few solutions (if you look beyond my beloved Google Reader to social, iPad-oriented apps), but they haven’t necessarily won the market yet. Flipboard announced in August that it’s been gaining traction, but that still only translates to 20 million total users, compared to Twitter’s 200 million active users. So the social reader market remains an interesting one to watch.

And one of those apps to watch is Thirst, which is relaunching its product Tuesday as a social reader for news. The company’s first product was more of a social reader for tweets, organizing the ones you missed in a new format. While that product was interesting, it definitely did not jibe with Twitter’s new API restrictions, and Thirst announced it would expand into other types of content after presenting at GigaOM’s Mobilize conference.

Rather than shuffle tweets, the new Thirst app instead tries to do what most social readers do: it presents with you the most popular news stories of the day, lets you select topics and categories that interest you, and read articles within the app. The big question is still traction and users, obviously — you need friends using the app to make sharing and commenting interesting, and your users have to be willing to declare their interests and set up the app. These are significant hurdles, no doubt.

But one of my favorite features in the app is the ability to like or comment on articles, which is reminiscent of the old function on Google Reader where you could like and comment on articles among your friends. Google unfortunately axed the feature despite user protest in favor of rolling out its social product in Google+. It’s smart that Thirst would model that feature in hopes of capturing some of the enthusiasm that the old Google Reader did.

In an email interview about the funding, Cross said that the financing will allow Prismatic to grow from a group of just six, and allow it to take on more of the recommendation and filtering tasks it is trying to build into the product:

“This financing finally allows us to have the team that we need to tackle the problems we have ahead in the next 24 months. To date, we’ve run Prismatic with only 6 people, and built it with only 5… the active customer base is growing fast, and we need the resources to keep up and move on to our new product, distribution, research, and revenue ideas.”

As we described in a profile of Cross and his startup earlier this year, Prismatic is one of a number of tools that are trying to fix the problem that media theorist Clay Shirky once described by saying “It’s not information overload, it’s filter failure.” The service is based on machine-learning algorithms developed by Cross — a data scientist who used to run a hedge fund and later worked as a consultant on a number of Google projects — and his co-founder Aria Haghighi, and is designed to learn from users what they like or dislike about the content they are reading through the service.

The news-filtering business is a crowded field

In that sense, Prismatic is similar to Zite, the Canadian-born startup that was acquired last year by CNN and recently came out with a revamped version of its service, and other smart filters such as News360 and Pulse. But only Prismatic has explicitly said that it wants to use news-recommendation as a kind of Trojan horse to get a foot in the door with users, so that it can eventually learn enough about them to recommend all kinds of things to them — including purchases. As Cross explained it recently:

“The idea is that we become this trusted agent that you rely on to show you things, and over time we can really start to learn a lot about you. We do care a lot about [news recommendation], but we’ve also thought through how it’s a stepping stone to something much bigger. And a lot of what we do in the background, and how we slice and dice data and so on… is relevant across a really wide range of problems.”

Prismatic, which has about six staff — many of whom work out of a small office in San Francisco’s SoMa district that looks a lot like a university dorm room — also recently launched a mobile version of the app, which Cross said was designed to take advantage of the down time that many phone users have while waiting for the bus or standing in line at the airport. The information needs of mobile users are difficult to satisfy in part because they have so little time, he said, but Prismatic managed to build what amounts to a specialized mobile browser that makes the process far more painless than the usual mobile web experience.

I experiment with almost every news-recommendation app or service that comes along, from News.me (which eventually merged with what was left of Digg) and Summify — which was acquired by Twitter and became the foundation of its daily emails pointing users to worthwhile content — to News360, Pulse and Zite. So far, Prismatic is one of the few that has been able to capture my attention and keep me coming back to the app, although the new Digg has also quickly become almost as important in my daily browsing habits as the old version of the service was.

That’s the central risk for Prismatic: the world of news recommendations is a harsh one, and users are always looking for whoever can give them the best fix. Twitter is clearly focused on doing this, as Cross has acknowleged, and so are plenty of others with fairly deep pockets. Hence the need to raise a $15-million Series A round — which came from Accel Partners, along with a personal investment from partner Jim Breyer, and from Russian oligarch and Facebook investor Yuri Milner.

In a recent post on my love-hate relationship with Twitter, I discussed how much I appreciate what the network has been able to provide in terms of being a real-time, open and distributed platform for publishing — and what an important role I think that has played in making us more informed about things like the Arab Spring revolutions, for example, thanks to the crowdsourced journalism of people like Andy Carvin of National Public Radio. But I also said that I hate the fact that Twitter is closing down third-party access by other platforms like Tumblr and Instagram, and that its desire to control more of its network seems to suggest that being open and having a good business are mutually exclusive.

Can you be truly open and still build a business?

Wilson, an early backer of Twitter — and someone who has also written a number of posts in defense of the open approach to community-building and the importance of being free — said that he believes being open and building a business can go together. But he added an important caveat: Being open, the Union Square VC said, is something that should come later and be done gradually, not right out of the gate the way Twitter did it. As Wilson puts it in his post:

“It is better to open up slowly, cautiously, and carefully rather than start out wide open and then close up every time an existential threat appears on the horizon… [Twitter] started out completely open, which allowed anyone to build a third party client, grab a huge percentage of Twitter users, and then threaten to take them away from Twitter. That’s not a sustainable relationship.”

This is Twitter’s dilemma in a nutshell: As we and others have pointed out a number of times, virtually all of the network’s power and growth has come from outside the company itself, in a way that is unlike almost any other significant social network. As Sarah Lacy notes in a post about Twitter’s unlikely success, every one of the important elements of the service — from the @ mention feature to the hashtag, and even the retweet — was developed by users, not the company itself. And now those same features are the ones the company is desperately trying to monetize to justify its financial market value.

In many ways, you could argue that even Twitter itself didn’t realize what the network was capable of until these things started to emerge — and I think they only emerged because the company decided to be as open as possible right from the beginning. It had a fully open API that third-party developers could use to do whatever they wanted, right down to creating a Twitter client that essentially competed with the service. As this problem became more and more obvious, the company started acquiring (and in some cases shutting down) other apps and services, and it has been stepping that behavior up recently.

Twitter is trying to turn back the clock

Doing this is probably a financial necessity in many ways — especially since Twitter is trying to justify all the money that it has taken from VCs over the years, as Hunter Walk of YouTube has pointed out — and so it is likely inevitable. And it doesn’t necessarily have to mean that Twitter shuts out third parties altogether, or clamps down on its network to the exclusion of all others: the company’s co-founder and chief product visionary, Jack Dorsey, said in a recent interview that he sees this process as “shepherding” the ecosystem towards a specific goal rather than shutting it down.

But what if the shepherd is herding the flock towards a cliff, or just fattening them up for slaughter? Mike McCue, co-founder of Flipboard — and a former member of the board of directors at Twitter until he resigned last month — told the Telegraph that he is concerned that Twitter is closing down too much and that it risks losing some of the power it used to have. As he puts it:

“Twitter can be incredibly valuable as an open communications mechanism but, if you close too many things down too quickly… you could easily do a lot of damage to that ecosystem. Twitter was created as an open platform, an open communications ecosystem, and I hope it can stay that way. You have to be really careful not to let money get in the way of that.”

So if Fred Wilson is right and Twitter made a mistake by being too open in the beginning, its current evolution is an attempt to turn back the clock or rewrite history — in other words, it is trying to find a way to undo some or all of the things that made it so powerful and fast-growing in the first place, while still hanging on to the value that being open created, so that it can monetize it. Facebook is also trying to monetize a user base that is built on free content, but it started closed and has become (somewhat) more open over time, which is a completely different challenge.

What Twitter is trying to do is a little like Wikipedia — something that has huge social value but is not a very good business — suddenly shutting down or controlling access to its content and inserting ads into everything. Is such a radical transformation even possible, or will the pressure be too great and cause cracks that rip the network apart in the process, or destroy its original value? We are about to find out.

Post and thumbnail images courtesy of Flickr users Fabio Venni and See-ming Lee

Founder and CEO Bradford Cross said in an interview with GigaOM that he hopes the app will transform the way people think of the mobile web, by making it easier than ever for them to browse and discover content.

Cross says the normal mobile experience is so irritating for users — who are usually pushed to either dysfunctional mobile versions of news sites or full-fledged web versions that are impossible to use on a handheld device — that many people simply don’t bother to try and consume much news on their iPhones. Prismatic’s app, which went live on Thursday morning in the iTunes store, has a built-in browser that strips out everything but the text and images from an article, the same way that services like Readability and Instapaper do, and this makes the reading experience substantially faster and more user-friendly, Cross says:

“Most of the time you won’t go into Safari on iOS and click on links, because you’ve been trained that that experience is so bad that you almost never do it — so you wind up not really using the internet. We wanted to make it so you could really explore on your phone and discover new things.”

Like the web version of the news-filtering and recommendation service, which came out of invitation-only beta in May, the Prismatic app allows users to connect using their Twitter or Facebook accounts, and will also import RSS feeds from Google Reader. All of this information is used to customize the content that is shown using Prismatic’s recommendation algorithms, and users can also create their own topic feeds and content lists from within the app. Because it is iPhone-based, the app also uses location as a way of suggesting topics that the user might be interested in, provided they agree to share that information.

Cross says the service has also tried to do some innovative things when it comes to the user interface and design of the app that make it more appealing to interact with the content inside the app, whether it’s to flag it as interesting or non-interesting, or to share it via Twitter and other social networks. So Prismatic came up with a pop-up interface that consists of three small buttons, and all the user has to do is slide their finger towards one to activate it — a system that is very similar to the fly-out menu options that mobile social network Path came up with for their iPhone app. Other menus within the app can be discovered by swiping the page right or left.

I’ve been using the Prismatic beta on my iPhone for some time now, and it definitely offers one of the fastest and cleanest news-browsing experiences I’ve had on a mobile device. News.me also had a good mobile news-discovery app that used your Twitter stream and follower graph as a source for its recommendation engine, but the service has since been merged with Digg, after its parent company Betaworks acquired the former news-sharing service earlier this year. Flipboard is probably the mobile news-based app I use the most, because it provides easy access to my Twitter lists and other content, and it also has a great user interface and is extremely fast.

Cross says that Prismatic had an even harder job than Flipboard when it comes to speed, because Flipboard (and other apps like Pulse) can do a lot of pre-fetching of content behind the scenes, since the content they allow users to interact with is relatively fixed. But in Prismatic, every tag on an article or blog post or other piece of content is a keyword that can be clicked on to reveal other content the service has found about the same topic, so the path a user will take is much more unpredictable. And speed is always a constant concern, he says:

“It’s got to be fast, so we had to bite the bullet and do a few things that took a couple of months to build. You know, with the phone you’re sitting in line, you’ve got three minutes, that makes your fuse for bull**** almost zero — you see a ‘loading’ image and if it crosses some time threshold, you immediately close the app and go somewhere else. That kind of ADD world is the reality for the phone.”

Most media companies take whatever website they have already developed and try to squish it into a mobile app or a mobile version of their website, but Prismatic has done the opposite — although it started with a website, Cross says it was it focused on the mobile experience from the beginning, and has actually changed the website version to make it more like the mobile app. That’s an approach that many traditional media players might want to emulate as mobile becomes an ever bigger part of the news-consumption business.