In my opinion, twitter vs facebook isn't a fair comparison at all.
Facebook is games, and photos, and chat, and events, and groups, and coca cola's official page. There are a lot of reasons to visit facebook.
Twitter is short status messages. Basically twitter is about half of what facebook was 5 years ago.
I think the 200 Million number is dishonest. I'm a twitter user, and have been for at least a couple of years...but I think I log into the site and look at it about once a week (here is my twitter: http://twitter.com/blhack). Most of those logins happen over my phone, meaning I don't see the "trending" ads...or any ads at all.
I said that I don't really use twitter. This wasn't always the case. I used to check it probably 10 times a day...but then a new service came along and replaced it for me. It does a better job at status updates...so I switched (and so did most of my friends). This is also a huge problem for twitter. What is twitter giving me that I can't get elsewhere (in my opinion: nothing...doubly so because the new layout is so hideous)
Status updates as they exist right now freaking suck. There's not any context, no way to organize them. They're disorganized. I used to always post songs that I liked to my facebook or twitter feed so that I could share them with my friends (as well as find them later). A problem was that I had to search through 5 years worth of statuses to find the songs.
I used to do the same thing with quotes. If I found a quote I liked, I would usually share it on facebook or twitter. Same problem as with the songs...and now I have a list for it: http://thingist.com/t/list/51/
Most users don't want to add context or have to organise stuff. I signed up for your service, added something I like, but having to fill out a form after? Ugh, I am lazy.
The reason why Twitter is successful is that its so simple, there are millions of use cases.
I agree with you on the form thing, which is something that I'm adding within the next week (the ability to add something to a list without having to fill out the second form [this was something that the users asked for]).
That said, people are willing to fill out extra information about (look at digg, reddit, youtube, fark, etc. etc.)...maybe not for status updates, but thingist isn't about status updates.
Use cases for twitter? I get hashtagging events (I saw this first hand at the intel appup conference last week), but what else beyond that?
I definitely do the "want to share but also 'bookmark'" thing with my Twitter updates. And, yes, hashtags somewhat solve this, but not really - at least not for me. I like the idea of lists on Thingist, but I don't want to have to categorize all my tweets.
If Thingist could automatically categorize my updates, but have a way for me to re-organize them, that'd be ideal. Seems like a decent amount of people fall into your same use case, where they tweet quotes, songs, videos, etc. Some of these would be easier to detect than others, but it's somewhat doable.
This seems some like weird cross section between Twitter, Tumblr, and delicious to me.
"Things that make me feel better when I'm sad" would be impossible to detect programatically.
"Show me all of the links to youtube or soundcloud I have posted" is totally doable, and is something that will probably happen within the next couple of days.
>Most of those logins happen over my phone, meaning I don't see the "trending" ads...or any ads at all.
That's the actual problem with Twitter regarding monetization, not the function of the site. Twitter is more a service/platform than a website, and thus Twitter consumption is decentralized. Therefore they're not able to capitalize on their broad reach through ad publishing. It's just as well, since Twitter has shown a staunch unwillingness to place traditional web ads on their site.
If they did have a FB/Google style ad setup, one apparent next step would be to charge for API services, to make up for lost revenue from people not using the official site. Third party developers would be forced to pass on the cost to consumers, most likely through hosting their own advertising.
Since Twitter doesn't seem to want to do that, this leaves customer data as their major capitalizable asset. Therefore the question is how capitalizable all the data flowing to Twitter is.
>Twitter is more a service/platform than a website
Yes, and this is the problem. They're providing coders, and bandwidth, and datacenters...and they're trying to do all of it for free. This is fine, and obviously twitter figured out a way to make it work for them (projections for $100 Million in revenue is freaking awesome for them), but I doubt it will go much higher than that.
Twitter is not a status message service. It is an instant information conduit for people. Its continued evolution in that capacity gives it a shot to be even more enduring and meaningful than Facebook. I love how you claim TW is what FB was 5 years ago... given that 5 years ago nobody would have bid $8BN on them. Further invalidating your assertion, is the fact that FB itself is bidding for Twitter
Agreed. The only time I've seen value in twitter is during times of emergency: my hosting provider goes down and has no other way to communicate than through twitter; people being rappelled from the ski lifts where I ski but there are no news outlets reporting on it so I go to twitter to find out; stuff like that. I remember a Charlie Rose interview with Mark Andreeson a few years back where Andreeson talked about the future of tech and the instant dissemination of news. From what I can see, twitter is the news outlet where the story breaks first.
To whoever is downvoting this person (it was at -1): knock it off. This was a valid question that sparked a valid discussion about how to monetize twitter.
It's not spam, and the user doesn't deserve to be effectively punished for asking the question.
I'm not defending the valuations of Twitter and Facebook (since I think they're too high), but I don't think it's useful to just look at their revenues for the previous year and extrapolate a multiple and call it ridiculous.
Both of those companies haven't had to focus on revenues. Their strategies were to get users first and then worry about money. To me the real test will be what is Facebook's revenue the first year they go public. If they haven't shown any significant growth, then I'd be worried.
Did you know that MySpace, on a per user basis, is twice as profitable as Facebook?
One of the problems these companies will face, having coasted on not focusing on revenue for so long, is how to find ways to generate revenue without alienating your user base.
It's a very tricky question, and done wrong, can do some serious damage to your site (I'm looking at you, Digg)
Is Twitter worth $10bn today? Probably not. Could it be? Easily. Hell, I'd invest assuming the CEO was good.
Twitter gets so much attention from its users each day. It has replaced email for social things. I have made so many friends and connections on Twitter it's almost ridiculous.
It's where people go to converse, to ask questions, to find out what is happening in the world. It's why Al Jazeera paid for sponsored search terms during Egypt.
Twitter is giving a voice to people that are previously unheard, and in the future, this will be huuuuuge in 3rd world countries - remember that Twitter can work entirely via SMS. We have no idea what is happening in most parts of the world, but with Twitter, we can listen and learn.
I genuinely think Twitter is one of the most revolutionary products on the internet since email, it has the potential to be significantly more impactful than Facebook, Microsoft or even Google can dream of.
The only thing holding Twitter back is people like you who look at Twitter and don't get it, it is so simple people cannot see why its valuable. :)
Please step out of the bubble and talk to someone not involved in the tech world. To them and most people, twitter is a buzz word used by news channels to sound 'hip'. Thats about it
WTF? Maybe for you, if you say so, but people still get several orders of magnitude more social email each day that twitter messages have ever been sent.
> It's where people go to converse, to ask questions, to find out what is happening in the world. It's why Al Jazeera paid for sponsored search terms during Egypt.
> Twitter is giving a voice to people that are previously unheard, and in the future, this will be huuuuuge in 3rd world countries - remember that Twitter can work entirely via SMS. We have no idea what is happening in most parts of the world, but with Twitter, we can listen and learn.
That's utter BS. Egyptians on the ground, rioting, don't think "Oooh! I must tweet about this".
I'll give twitter 5 years before it's irrelevant. Maybe 2 years if AOL buys it.
At this point I'm not sure any of these investors are valuing twitter as a company based on revenues, this is just strategic or "greater fool theory" investing. These companies just think they will be able to sell these shares at a higher price then they bought them to some greater fool later on.
So nobody is going to say anything about this :Twitter may be valued as high as $10 billion, based on the microblogging service’s recent low level sale discussions with both Facebook and Google executives.
Maybe I missed it but I had no idea Facebook or Google was interested in acquiring Twitter. Google, I expected, Facebook is a bit shocking...What would they do with it? Shut it down? FB needs to be careful--they're already seen as big brother to many.
I wonder how skewed this community is. Within the HN world there is a healthy skepticism about the value of Twitter, yet at the same time support for it, and everyone claims to be getting value from the service.
Outside of this bubble what I hear is that FB subsumed all of Twitter's features a year or two ago and they have abandoned their twitter accounts. Of course this is just my experience and may not be representative in the bigger picture, but having worked on a project that analyzed the various hoses from Twitter what I found was that when you eliminate spam and filter out all the people that tweet less than one every couple of days, the actual number of people using the service (at least for lang=EN) was dramatically lower than the accepted numbers. Possibly the growth is outside of the English speaking world.
Of course there is all the hype around Twitter saving kidnapped children in China and being behind revolutions in the Middle East, but I suspect these are news stories without much substance. Given that Egypt is 165 and China 105 in world literacy ranking (CIA world fact book) I seriously doubt that Twitter plays a role anywhere close to word-of-mouth communications.
That said, who knows what it's worth. If Twitter had come up with the "Like" idea and integrated that into its service before FB did then I might agree with the valuation, but in this economy he who holds the most ad-centric data, and who garners the most user eyeballs and time has the most potential to monetize. And right now that's FB.
Well, the attitudes you cite aren't really in conflict; there's no contradiction in finding the service to be useful, and still having doubts about the valuation of the company.
That said, if you view twitter as an advertising medium, then read-mostly users who tweet rarely (or never) could still be a revenue source, so long as they're reading ads along with everything else. A teenage kid who checks for tweets from Justin Bieber five times a day is a pretty valuable ad target (for some ads), but it might be hard to find a trace of them in the data feeds.
I'm reading "Seeking Wisdom", which outlines Warren Buffet and Charlie Munger's investing philosophies. Two things stand out -
1. They almost never invest in high technology.
2. They talk about how an unsexy business that produces value for its shareholders is just as good as a sexy one. Money has no memory - money you made from dividends or equity increases in a company that sells bricks is just as good as from a company that sells something more exciting.
Thus, I wonder if a lot of high tech companies are like airlines - people own them because they're sexy, whereas totally decent boring unsexy companies are much lower valued.
That doesn't get into whether Twitter will justify the $10B valuation or not, but interesting to think about - saying Buffet and Munger have done pretty well would be quite the understatement.
And I definitely know that Twitter ain't worth 10 billion dollars.
That's a lot like saying "I know x startup will fail." You are probably right considering vast majority of startups shooting for the stars fail. But you also don't get very many points for predicting what's gonna fail. And so it is better to invest in 30 companies where 29 turn out to be absolute crap and one turns out to be Google versus investing in 30 average companies that have average returns or NOT investing in any company at all.
Of course you can invest in one solid company and have that be google. But I don't know very many people that have done that.
Charlie Munger is worth reading and listening to. He once said in an interview that a person should only be allowed to make 20 trades in their lifetime. (Or some smaller number.) His reasoning was that it would limit emotional influences when making investing decisions.
I've been wondering if Microsoft's stock price is low due to the perception that they aren't sexy. Their corporate division is making loads of money and they are priced like a low margin commodity business. Of course, maybe their long term survivability is in question and so the stock is low.
I would rather buy stock in Microsoft at its current valuation than buy stock in Twitter at its current valuation.
In theory this is true but I think there are intermediate fluctuations that don't follow a rational principle. I think Warren Buffet is right when he says the market is not efficient. Maybe over a long period of time and across many industries it is but not necessarily for a particular stock.
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[ 5.7 ms ] story [ 93.4 ms ] threadThat's $100 Million a year for the next hundred years.
a) peak at around 200M users b) only manage to monetize $0.50 per user annually?
FB makes $4 per user. You think Twitter won't be able to manage atleast $2? They've barely capitalized on the analytics they perform thus far.
Facebook is games, and photos, and chat, and events, and groups, and coca cola's official page. There are a lot of reasons to visit facebook.
Twitter is short status messages. Basically twitter is about half of what facebook was 5 years ago.
I think the 200 Million number is dishonest. I'm a twitter user, and have been for at least a couple of years...but I think I log into the site and look at it about once a week (here is my twitter: http://twitter.com/blhack). Most of those logins happen over my phone, meaning I don't see the "trending" ads...or any ads at all.
I said that I don't really use twitter. This wasn't always the case. I used to check it probably 10 times a day...but then a new service came along and replaced it for me. It does a better job at status updates...so I switched (and so did most of my friends). This is also a huge problem for twitter. What is twitter giving me that I can't get elsewhere (in my opinion: nothing...doubly so because the new layout is so hideous)
What's the new service?
/Warning: Rant/
Status updates as they exist right now freaking suck. There's not any context, no way to organize them. They're disorganized. I used to always post songs that I liked to my facebook or twitter feed so that I could share them with my friends (as well as find them later). A problem was that I had to search through 5 years worth of statuses to find the songs.
On thingist, it's just a list: http://thingist.com/t/list/38/
I used to do the same thing with quotes. If I found a quote I liked, I would usually share it on facebook or twitter. Same problem as with the songs...and now I have a list for it: http://thingist.com/t/list/51/
Or bars I like: http://thingist.com/t/list/65/
Or things that blow my mind: http://thingist.com/t/list/134/
etc. etc.
The reason why Twitter is successful is that its so simple, there are millions of use cases.
That said, people are willing to fill out extra information about (look at digg, reddit, youtube, fark, etc. etc.)...maybe not for status updates, but thingist isn't about status updates.
Use cases for twitter? I get hashtagging events (I saw this first hand at the intel appup conference last week), but what else beyond that?
If Thingist could automatically categorize my updates, but have a way for me to re-organize them, that'd be ideal. Seems like a decent amount of people fall into your same use case, where they tweet quotes, songs, videos, etc. Some of these would be easier to detect than others, but it's somewhat doable.
This seems some like weird cross section between Twitter, Tumblr, and delicious to me.
Categorizing them is really, really hard to do. Look at the ways that this user uses the site: http://thingist.com/t/item/3051/
"Things that make me feel better when I'm sad" would be impossible to detect programatically.
"Show me all of the links to youtube or soundcloud I have posted" is totally doable, and is something that will probably happen within the next couple of days.
That's the actual problem with Twitter regarding monetization, not the function of the site. Twitter is more a service/platform than a website, and thus Twitter consumption is decentralized. Therefore they're not able to capitalize on their broad reach through ad publishing. It's just as well, since Twitter has shown a staunch unwillingness to place traditional web ads on their site.
If they did have a FB/Google style ad setup, one apparent next step would be to charge for API services, to make up for lost revenue from people not using the official site. Third party developers would be forced to pass on the cost to consumers, most likely through hosting their own advertising.
Since Twitter doesn't seem to want to do that, this leaves customer data as their major capitalizable asset. Therefore the question is how capitalizable all the data flowing to Twitter is.
Yes, and this is the problem. They're providing coders, and bandwidth, and datacenters...and they're trying to do all of it for free. This is fine, and obviously twitter figured out a way to make it work for them (projections for $100 Million in revenue is freaking awesome for them), but I doubt it will go much higher than that.
So, what? All that matters is how much time a user spends on their site.
It's not spam, and the user doesn't deserve to be effectively punished for asking the question.
Both of those companies haven't had to focus on revenues. Their strategies were to get users first and then worry about money. To me the real test will be what is Facebook's revenue the first year they go public. If they haven't shown any significant growth, then I'd be worried.
One of the problems these companies will face, having coasted on not focusing on revenue for so long, is how to find ways to generate revenue without alienating your user base.
It's a very tricky question, and done wrong, can do some serious damage to your site (I'm looking at you, Digg)
* They not even started yet serious monetization efforts.
* $10B or not is just a function of how devalued USD currency is and at which stage of the bubble we are ($50B for Facebook, $6B for Groupon).
Twitter is obviously fun and useful for some, eg journalists who want to pad their celeb gossip news story out with "X tweeted Y", etc
But is it really worth $10bn to humanity? Nope.
Is it really ever going to be worth anything close to that based on revenue? Again, nope.
How did you arrive at that conclusion?
Is Twitter worth $10bn today? Probably not. Could it be? Easily. Hell, I'd invest assuming the CEO was good.
Twitter gets so much attention from its users each day. It has replaced email for social things. I have made so many friends and connections on Twitter it's almost ridiculous.
It's where people go to converse, to ask questions, to find out what is happening in the world. It's why Al Jazeera paid for sponsored search terms during Egypt.
Twitter is giving a voice to people that are previously unheard, and in the future, this will be huuuuuge in 3rd world countries - remember that Twitter can work entirely via SMS. We have no idea what is happening in most parts of the world, but with Twitter, we can listen and learn.
I genuinely think Twitter is one of the most revolutionary products on the internet since email, it has the potential to be significantly more impactful than Facebook, Microsoft or even Google can dream of.
The only thing holding Twitter back is people like you who look at Twitter and don't get it, it is so simple people cannot see why its valuable. :)
You can follow me on Twitter here: @plc
When Jorge Lorenzo has his Twitter handle printed on his Yamaha motorcycle, its safe to say that Twitter is used by people outside the tech world.
I'd say it's safe to say a large amount of people have tried twitter, but their retention rate is abysmal.
> "It has replaced email for social things"
WTF? Maybe for you, if you say so, but people still get several orders of magnitude more social email each day that twitter messages have ever been sent.
> It's where people go to converse, to ask questions, to find out what is happening in the world. It's why Al Jazeera paid for sponsored search terms during Egypt.
> Twitter is giving a voice to people that are previously unheard, and in the future, this will be huuuuuge in 3rd world countries - remember that Twitter can work entirely via SMS. We have no idea what is happening in most parts of the world, but with Twitter, we can listen and learn.
That's utter BS. Egyptians on the ground, rioting, don't think "Oooh! I must tweet about this".
I'll give twitter 5 years before it's irrelevant. Maybe 2 years if AOL buys it.
I'll take that bet thank you very much. :)
How about: if Twitter hasn't IPO'd / been acquired for greater than $10Bn in 5 years, you owe me dinner. (we live close to each other remember)
Obviously Twitter is worth what someone is willing to pay for it. If AOL had 100Bn in the bank, maybe they'd buy twitter for 10Bn.
But to me, that wouldn't prove Twitter is worth 10bn on an open market, it just validates that AOL is absolutely batshit crazy and likes losing money.
Maybe it's just me... Everyone in my extended family uses email regularly. Most use facebook weekly or daily. Twitter rarely comes up at all.
Maybe I missed it but I had no idea Facebook or Google was interested in acquiring Twitter. Google, I expected, Facebook is a bit shocking...What would they do with it? Shut it down? FB needs to be careful--they're already seen as big brother to many.
Outside of this bubble what I hear is that FB subsumed all of Twitter's features a year or two ago and they have abandoned their twitter accounts. Of course this is just my experience and may not be representative in the bigger picture, but having worked on a project that analyzed the various hoses from Twitter what I found was that when you eliminate spam and filter out all the people that tweet less than one every couple of days, the actual number of people using the service (at least for lang=EN) was dramatically lower than the accepted numbers. Possibly the growth is outside of the English speaking world.
Of course there is all the hype around Twitter saving kidnapped children in China and being behind revolutions in the Middle East, but I suspect these are news stories without much substance. Given that Egypt is 165 and China 105 in world literacy ranking (CIA world fact book) I seriously doubt that Twitter plays a role anywhere close to word-of-mouth communications.
That said, who knows what it's worth. If Twitter had come up with the "Like" idea and integrated that into its service before FB did then I might agree with the valuation, but in this economy he who holds the most ad-centric data, and who garners the most user eyeballs and time has the most potential to monetize. And right now that's FB.
That said, if you view twitter as an advertising medium, then read-mostly users who tweet rarely (or never) could still be a revenue source, so long as they're reading ads along with everything else. A teenage kid who checks for tweets from Justin Bieber five times a day is a pretty valuable ad target (for some ads), but it might be hard to find a trace of them in the data feeds.
1. They almost never invest in high technology.
2. They talk about how an unsexy business that produces value for its shareholders is just as good as a sexy one. Money has no memory - money you made from dividends or equity increases in a company that sells bricks is just as good as from a company that sells something more exciting.
Thus, I wonder if a lot of high tech companies are like airlines - people own them because they're sexy, whereas totally decent boring unsexy companies are much lower valued.
That doesn't get into whether Twitter will justify the $10B valuation or not, but interesting to think about - saying Buffet and Munger have done pretty well would be quite the understatement.
And I definitely know that Twitter ain't worth 10 billion dollars.
That's a lot like saying "I know x startup will fail." You are probably right considering vast majority of startups shooting for the stars fail. But you also don't get very many points for predicting what's gonna fail. And so it is better to invest in 30 companies where 29 turn out to be absolute crap and one turns out to be Google versus investing in 30 average companies that have average returns or NOT investing in any company at all.
Of course you can invest in one solid company and have that be google. But I don't know very many people that have done that.
I've been wondering if Microsoft's stock price is low due to the perception that they aren't sexy. Their corporate division is making loads of money and they are priced like a low margin commodity business. Of course, maybe their long term survivability is in question and so the stock is low.
I would rather buy stock in Microsoft at its current valuation than buy stock in Twitter at its current valuation.
Stock prices are (usually) set based on two factors: The current earnings/revenue situation and future expectations.
MSFT and APPL both have similar current earnings. Future expectations may be an entirely different matter.
If twitter is being touted as a $10B corp, then someone must have some expectations of increased future value.
That's $50 per user. Or around $400 per active user.
Nuts.