TweetDeck bought by Twitter for $US40 million, but will it survive?

Third-party Twitter client TweetDeck has finally been bought by the micro-blogging company in a deal worth $US40 million, ending weeks of speculation about a potential deal between the two companies.

The purchase not only confirms an ongoing trend of high valuations in the tech sector, but also highlights just how far Twitter is willing to go in order to control its ecosystem, which has expanded exponentially through third-party clients such as TweetDeck.

Twitter wants to boost its small revenue base with advertisements, but the popularity of third-party clients mean many users won’t even see them. By taking control of a popular ecosystem such as TweetDeck, Twitter will have the ability to put ads in front of more users and hopefully become profitable.

While neither company has yet commented on the deal, both CNN and CNET reported last night the transaction had occurred, confirming a report from TechCrunch earlier this month.

The transaction comes just a few months after TweetDeck was reportedly discussing a takeover by UberMedia for $US25-30 million, at which point Twitter entered in the discussions with a higher bid.

Sources have told TechCrunch that Twitter believes an acquisition by UberMedia – which already controls the UberSocial and Twidroyd apps – would have given the firm too much power over the Twitter ecosystem.

Twitter has already made a number of efforts to control the power of third-party clients, which for many users are their preferred method for reading and writing tweets. It pulled API access for UberMedia back in February (it was later reinstated) and UberTwitter was forced to change its name to UberSocial.

TweetDeck does not make a financial contribution to Twitter. Although the Britain-based start-up received $300,000 in seed funding in 2009, along with $2 million from unnamed investors in that year as well, revenue is unknown, but not expected to be high.

Some analysts believe there is a real possibility Twitter will kill off TweetDeck – it has already pumped a lot of resources in the Twitter.com site and encouraging TweetDeck’s millions of users to stay away would hurt that process.

As PC World points out, even keeping some of TweetDeck’s functionality can serve as a problem, as the program allows users to integrate accounts with Facebook and Foursquare.

“Maybe Twitter would want to keep TweetDeck around as an officially sanctioned desktop solution. But would it want to maintain the integration with competing services like Facebook and Foursquare under its company banner?”

As Twitter showed recently, it is prepared to revoke API access in order to control its position in the market. Buying and abandoning TweetDeck is not out of the question.