1. Goodwill with developers might be worth more than $40m in the long run. I think the argument about users is fallacious: users will find something else (because there aren't any rivals to Twitter itself) and quickly forget. Developers don't forget as quickly.
2. Maybe they actually liked the software and wanted to distribute it
3. Maybe it was a talent acquisition
Anyone who has a business built on an API to another service is completely at the whims of that service, and pretending that you form some form of "threat" to the host is a dangerous move. I would hazard that the only company that has ever grown large enough to strong arm the host was Zynga with Facebook (see Zynga/Facebook Credits).
1. Goodwill with developers might be worth more than $40m in the long run. I think the argument about users is fallacious: users will find something else (because there aren't any rivals to Twitter itself) and quickly forget. Developers don't forget as quickly.
2. Maybe they actually liked the software and wanted to distribute it
3. Maybe it was a talent acquisition
Anyone who has a business built on an API to another service is completely at the whims of that service, and pretending that you form some form of "threat" to the host is a dangerous move. I would hazard that the only company that has ever grown large enough to strong arm the host was Zynga with Facebook (see Zynga/Facebook Credits).