One of the disappointments for me about Twitter has been the lack of engagement. Many (most?) people use it as a broadcast medium. The longest, most engaged threads I see are (big surprise, internet) trolling and fighting.
Here's an idea: gamify engagement for verified accounts. If you're a big enough personality to have a verified account, you must @reply to, say, 1% of your followers before you can write another naked tweet. Or you can buy tokens that let you tweet without forced engagement, price determined in part by your follower count.
For a normie like me, the novelty of seeing your favorite celeb or software hero or whoever on twitter quickly wears off once you realize they send tweets once in a blue moon and never reply. You might as well be on their mailing list instead.
Celebrities are only on Twitter because it is a broadcast mechanism. It is precisely the unidirectional nature of Twitter that meant it caught on for the media industry.
But we don't need another mechanism for celebrities to beam their thoughts into our heads, and I think that's become pretty evident by the slowdown in user adoption. Twitter could differentiate by being the place for celebrity engagement.
Clearly some exceptions would have to be made, e.g. for news agencies and such.
Celebrity engagement is essentially impossible. The numbers don't work. No celebrity can "engage" with a million people when there's only 86,400 seconds in a day. If you don't like the "million", put whatever number you like in there that is still comfortably greater than the number of seconds in a day. Engagement doesn't scale.
You can create the illusion of engagement, but that's all.
Note the lack of the word "Twitter" in the reply up until this sentence. It's not even about Twitter. It's just generally impossible.
Correct. However, the illusion of engagement can be powerful. e.g. Obama and Clinton campaigns were able to use dinner w/ candidate or famous supporters as a fund-raising lottery tool. Would people engage more with Twitter if they knew there was a small but real chance of getting a non-canned response from celebs?
Exactly. Winning the lotto is essentially impossible as well, but millions still play because there's a (ever so small) non-zero chance they'll hit. This would basically be celeb lotto.
Correction: There is a small chance that the celebrity/politician's publicity agent will tweet back at you. There is an even smaller chance the celebrity will tweet back at you.
I think that this is part of the reason why it's really the "illusion of engagement" and not real engagement. The elite will perpetually be separated from the masses... the specific medium may change, but the separation will persist.
But I think it's again worth highlighting that this "separation" isn't because they're in their ivory towers, but sheer simple math. Nobody can "engage" with millions of people. It's part of why Internet flash mobs destroying people's lives is something we need to figure out how to get a handle on culturally, and start stigmatizing, because nobody can "engage" with a mob to defend themselves. It's why even if you're only "Internet famous" and you're running a blog with thousands of readers, you can't afford to spend even a second a day on each of your readers. It's not really an "elite" problem.
Yep, the best reason to use Twitter is that it's far easier to broadcast and it's easy to reply to random followers. On Twitter it feels easier to have conversations and I think that's the core strength, not that it's just an activity stream.
I think the real draw for following celebs on twitter is not that it isn't broadcast, but the idea that it's a more "unfiltered" broadcast; that it's more likely you're getting an off-the-cuff remark straight from the actual celebrity instead of a scripted press clipping from their PR flacks.
At least, that's the illusion. And while there are plenty of "managed" accounts run by paid "ghost tweeters", there have also been enough embarrassing deleted tweets to show that at least some remarks are coming straight from the horse's mouth.
No, in fact there are also a number of tech companies up right now because they are showing growth. Meanwhile twitter has been flat. The investment community didn't decide to gather around and pick on twitter because it would be fun.
edit: apparently people didn't take too kindly to pointing out that not all tech companies are having a downward trend. Here are tech companies that are up compared to one year ago: $FB, $GOOG, $MSFT, $AAPL, $AMZN
I don't know what Cramer was saying a year ago, but for the past few months he has been very negative on the company. He was one of the loudest people calling for Dick Costolo to resign.
It's just the delusion of wall street. They expect hockey stick growth figures from a single product company that clearly already dominates their niche. Even though most people feel Twitter is declining, it's actually still growing.
The graphic shows the twitter bird in a freefall, but what's actually happening is the public markets traders worst nightmare, the bird is just flying straight on.
Twitter's user growth has been nearly flat. This is a fact. Whether this matters and whether Twitter can turn things around are different issues. Twitter's problem is that it went public as a growth company comparable to Facebook when it might just be a niche social network.
I think part of the issue is that Twitter is a great tool for people in media/news as well as PR/celebrities etc, and because of the role these groups play in society they have been doing what amounts to a lot of free advertisement for Twitter. All along this may have been "artificially" increasing Twitter's user numbers relative to the kinds of users they want.
Twitter's valuation problem is that they sold Wall Street on a user growth story instead of revenue growth story. Had they done the latter, they stock price would be much less volatile and Dick Costolo would still have his job.
They actually beat analyst expectations for revenue, but the sales pitch for a long time has been, "Revenue doesn't matter, because massive user growth!" That doesn't pan out so well when user growth is OK at best.
The real problem is core to the product (it's really hard to become an active user), and one that's both really difficult and really time-consuming to solve.
I wouldn't call it a delusion. Investors were valuing Twitter at close to $40 Billion because they were expecting Facebook-like growth. Now that they don't see that growth they currently value it at around $20 Billion. Based on simple things like P/E that's still a good number.
I still think there's a good chance of a turnaround for Twitter. It's widely used by the media and celebrities. If they come up with a better way to consume this then I think they have a good chance of getting back to their recent highs in their stock.
I agree. It's the opposite of delusion, quite grounded in reality.
And I agree with your second point. Their current level of network effect / lock-in should give them plenty of runway to find new ways to grow and/or monetize.
I am not so sure. They actually have negative earning, GAAP-wise, caused by a huge amount of stock based compensation and acquisition costs. Even with all these spending, Twitter is not showing any growth. Twitter will lose more engineering and product talents as the stock price goes down. They can't also use stock to acquire growth either. It's a dead spiral. Twitter has been leveraging Wall street goodwill and hype but I think it's the start of the end.
I wasn't aware of the extent of stock compensation costs, but I do realize that they haven't turned a profit.
You don't deny the power of the platform, network, and brand themselves, right? I forget the buzzword for this type of non-fungible, unique asset. I guess we just wait and see what sort of valuation it fetches in an acquisition.
No I am not denying the value of the brand and the network, but I don't know how to valuate these assets. I don't see how they are worth 20B, but maybe some others do. In terms of the engineering platform, I am quite confident a similar platform can be built with much less than 1B. Twitter platform is not that special in terms of engineering challenges.
One plausible risk scenario is, under pressure, they try make significant changes without incremental testing.
I don't see a good alternative channel to Twitter right now. Facebook certainly isn't it. Instagram definitely sliced out some of Twitter's market, but can't do the same in other use cases. Neither can Snapchat.
From the standpoint outgoing traffic Facebook dominates Twitter. That is a concern. Fake traffic or real, this is a signal of engagement.
Another problem is ad platform dominance. Advertisers will spend on well built platforms with large audiences. Google and Facebook clearly excel in this area now. It isn't so much Google & Facebook that threaten Twitter but all the other social apps and sites which are banking on the exact same model to justify their valuations. If Twitter is earning 1/3rd or 1/4th of the amount per user Facebook is in the long term this could be a problem.
There is a price where Twitter becomes a very strong acquisition target. It certainly is heading in that direction.
Recent product changes have led me to use Twitter less. Twitter's official app UX is a mottled mess. I stalk the feed from 3rd part clients for news and product updates, but contribute less of me. Ello now gets my views and posts. I even have a final goodbye tweet on standby just waiting for the next Facebookification decision out of Twitter. I'm pretty sure other power users have been changing their usage patterns too just from personal observation.
Most academics disagree that there is such a thing as "Wall Street delusion". TWTR was and is accurately priced at all times. In the past, it was more valuable as investors had larger reason to believe in the future growth prospects of the company. Now it is less valuable because we have seen that the company has failed to live up to those expectations.
I'd be willing to accept it's just the press with their doomsday headlines that make it seem as if there was a delusion. But why does it drop 5% in a day then? Why are analysts always so surprised when actual reports come out?
It always takes me by surprise. For example when Amazon finally split their revenue to show how much their cloud offerings were making the stock jumped by 18%. How is that even possible? They have a cap of 250B one confirmation of something any geek with a calculator could've estimated makes the company jump 50 billion dollars.
You can tell me TWTR was accurately 2 years ago, and it's accurately priced today, but I can't believe it was accurately priced friday.
(I'm long in AMZN and totally surprised by the windfall)
You are technically correct. Silicon Valley uses P/E when calculating valuation/revenue, because startups are rarely profitable.
They aren't equivalent in the same way that user growth and revenue growth are not equivalent to profit growth. A misinformed statistic for a misinformed view of how to build a successful business.
Valuation/revenue would be price/sales, or P/S if you will. The P/E is a "forward P/E", with P = "today's price" and E = "someone's expectation of next year's earnings".
Twitter needs multi-level threaded discussions and "sub-tweets" that are more than 140 characters. Right now Twitter is an exercise in frustration. It takes so much work to understand other peoples' views that few bother, leading to endless misunderstandings and fights.
A miscommunication platform. #DescribeTwitterIn3Words
That's part of the appeal. Twit something just before you go to bed, and find out that it got misheard and created a twitterstorm overnight and in the morning your boss says you are fired because someone figured out where you work and DDoSed your employer's network in retaliation.
Usually you have to juggle chainsaws for a similar rush.
Character limit also means that the views that make good sound bites have a better chance of winning vs more nuanced views. Succinctness is good, but it isn't necessarily the same as 140 characters
Sometimes the character limit delivers on its promise. Other times, it's as useless as posting a 30 MPH (50 KPH) speed limit on a six-lane interstate highway.
Sure, but also a relic of the time of its inception. The usefulness of the limit was technical and is now cultural.
People very often work around it by creating a string of tweets to build long(er) form posts. It's mostly arbitrary right now and people who wish to use the service for longer content have to do so in a stupid way.
It's not as though there's an actual limit, it's just an extra step to take if you wish to produce more verbose content.
It's the root of what identifies Twitter and there is value in consuming 140 char tweets. Twitter is not for everyone and shouldn't try to be. That will be its demise though as investors demand that it become more like Facebook and more power users leave the platform. Soon, only the bots and marketers will be posting regularly.
"Perhaps" and "so far" are sort of the keywords here.
It was probably a combination of things at the time, but the important question is now, nine years on, is there a better way for Twitter to use its position?
I disagree. IMO, every feature addition Twitter has made in the few years have done nothing but muck up what was once a elegantly simple and beautiful thing. I think your suggestions are just more of the same.
multi-level threaded discussions would ruin twitter.
you have reddit for that kind of discussions.
twitter is just really for 1:n-communication, to give your followers an update. don't try to change the way a social network works, just use another one which suits your needs.
I think that's the least of Twitter's product woes. They're struggling from user growth.
The value of twitter is directly correlated with the time and effort they put into curating their personal feed. Power users do that all day long; most new users don't, never see the value, and leave the service.
That's probably 99% of Twitter's problem right now. It's so hard to see the value in Twitter if you don't invest a lot of time and effort.
You have to ask yourself what _drove_ that initial valuation that you're now being "cheaply" That initial valuation was driven by the belief that they would be aggressively adding new users. It wasn't based on them doing a great job of extracting a better profit from a fairly static install base.
I agree. I understand wall street is looking for massive user growth. That seems to be a wild misunderstanding of what Twitter is, though.
I'm in the same camp as a few other commenters. It seems that Twitter's value is really in being a broadcast platform for big names. I don't think there is a viable contender out there. That population is finite, and "followers" can be passive consumers. I'm not sure that there is going to be much growth in the user base, and I think that's a natural property of twitter. I think it's still valuable and can be relevant for quite a long time.
By comparison, Groupon has $3.19 billion in sales, and is valued at $3.17 billion.
Why does Twitter deserve six or seven times the valuation that Groupon is getting? Especially given Twitter's user growth has fallen off a cliff. Of course they're in different segments, but financial results are all that matter ultimately. My opinion: they don't deserve the valuation, the market has realized it, and will continue to deflate their extreme valuation, eventually over-correcting due to negative sentiment. They're worth $5 to $10 billion today.
On the bright side for Twitter, Google will probably buy them after their stock sinks further.
That would be a big mistake for Google to buy them. Twitter was hyped by the media since it's used by the media, which led to its overvaluation. It is used surprisingly little by the ordinary masses.
But what does that mean to the company and its employees?
I bring this up because of the stock market crash having such ridiculous effects from the great depression era. Though I may just be uneducated on what really happened.
The stock price need not matter at all to the company; the stock price is completely independent of the company. Once the shares are sold, the company no longer owns them, so whatever happens, happens, just like whenever you sell anything else. If a farmer sells some corn, and the price drops drastically afterwards, it makes no difference to the farmer.
However, the owners of the company might get together and force the board of directors to do something, like fire the CEO. The CEO, who probably has a lot of compensation as stock or options, would like price to be higher, so he is likely to take actions to get the stock price higher. Such actions may or may not be wise, and may or may not be helpful for the company. Frequently they aren't...
Nothing in particular. The brokers already got paid, and had plenty of opportunity to sell their shares if they wanted to. In the long run most companies eventually go into decline.
Now if you were Jack and you were semi-entertaining trying to be co-CEO do you think events post earnings would absolutely put the nail in the coffin in your mind of being Twitter CEO? I have to believe you'd be like "Who wants this job?!" realizing just how far and long the road ahead is. They're basically Yahoo now with a strong core base of users but little growth prospects.
It's not a business, it never was worth even the IPO value. You are trying to make a business out of 140 character text messages which is pretty silly.
...and there's really nothing stopping it from falling much much more. There's really no justification for the value placed on this company--or many other tech companies that have interesting offerings but haven't actually managed to create a real business.
TWTR will likely be marked as a turning point for the 'tech bubble 2.0' when tech companies get put in two camps. Those that are real business and those that are not. I don't think we're in a 1999-esque tech bubble but there are a lot of hyped up companies that aren't real businesses that need to get washed out of the system.
Yeah, but it took them many years and massive leverage to achieve that. Also, revenue != profit. As of today, they are drowning in debt, there doesn't seem to be a strategy for turning things around and now investors don't even believe in them.
No, I can't. You can go look at the SEC like everyone else who can be bothered to actually have a clue before making comments. This is public information, there is no need to be so lazy as to not even bother looking.
Issuing debt does not mean a company is "drowning in debt". The term "junk" debt does not mean a company is "drowning in debt". If a company has more cash on balance sheet than debt, it's net debt is negative. When they issued this debt they had negative net debt. Now they have negative net debt. They were not, are not and have never been "drowning in debt". Promoting false information about a public company is potentially illegal.
If you owe debt and you are burning through your cash and there is no sign of turning the situation over in the near future, then you are "drowning in debt", IMO, or you will be in a very short time. But that's just me and my "potentially illegal" point of view.
Again, a minute to look at their financials. There is a thing called the "cashflow statement". They are not "burning through cash". Operating cashflow is positive. Some quarters their capex is larger than operating cashflow, sometimes it's less.
So to suggest they are "drowning in debt" only shows no understanding of simple financial matters, and little regard for securities legislation. Not all opinions are valid.
But their net income is around -$600 million annually.
You can have a business that tells people that if they give you a dollar, you'll give them $1.50.
Twitter right now (oversimplified) generates $2 billion in revenue by giving away $3 billion. Of course they could try tightening their financial belts, but that'd probably hurt their growth.
This is an incredibly stupid analogy. Twitter doesn't give it's users money. Twitter doesn't give it's advertisers money. They run a high gross margin business. Your analogy would be a NEGATIVE gross margin business. Their cost base is too high right now given the revenue, but there is no reason to think they need to grow at the same rate. Many profitable companies at one stage ran at a loss.
"So a company that does $2B/year in revenue isn't a real business?"
If management consistently can't find a way to make that level of revenue without spending far more each year then yes it's not a real business.
If I bought iPhones at full retail and then sold them for less than I paid I'm sure I could quickly rack up tons of revenue... but this wouldn't be a real business. It's this concept that a lot of 'tech' companies struggle with and why their execs want to focus on 'user growth' and 'revenue' and not normal metrics like 'profit' and 'cost of goods sold.' The later is where it gets real ugly.
Yes, there's a 'ramp up period' where costs outweigh revenue, but Twitter has run out of runway. There's no clear sign of how they'll increase revenues to justify their cost of generating that revenue. They could start a slash-n-burn operation but everyone will just read that as the company going under and people will ditch the platform faster than MySpace.
I think you possess a fundamental misunderstanding of why this is happening.
> If management consistently can't find a way to make that level of revenue without spending far more each year then yes it's not a real business.
Could Twitter fire most of its developers and sustainably turn a profit? Yes, it absolutely could. Hell, I could do that. "Sales people, keep doing the same thing. All this other expensive overhead is gone." But instead the executives choose to invest the company's would-be profits (and a little more) back into the company, in hopes that they will be even bigger later on. And they're still growing (at a rate faster than expenses are), even beating analyst expectations to this point. The stock drops because analysts are concerned this won't continue to be the case (Wall Street is weird).
In a very real way, the only time big tech companies start turning a profit is if they think they are reaching the peak of the revenue they could generate. Until then, it's time for growth. That growth is still very valuable, they're just hot taking profits yet. http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...
Hence, if you're looking at every company to determine if it is profitable or not, you probably come away with a very misleading, "The world is doomed" view of the economy. Companies aren't taking their chips down yet, because they're still confident they'll grow.
It seems counter-intuitive, I know, but that's the reality of how companies act, in order to maximize the profits long-term.
For new companies, you are on the money. But twitter has been around for 9 years. It is way past time to draw that line in the sand and turn towards profits. Even ignoring the 9 year history, their user growth curve is flattening, and has been for a year. The second it started to go flat, they should have turned to profits.
"New" is a relative term. I think there's still some gas in the tank, but if there's no growth in the next couple years Twitter will probably be on a permanent downward trend.
"I think you possess a fundamental misunderstanding of why this is happening. Could Twitter fire most of its developers and sustainably turn a profit? Yes, it absolutely could. But instead it chooses to invest its would-be profits (and a little more) back into the company, in hopes that they will be even bigger later on."
Indeed their only real option at this point is likely to start slashing cost and hope it doesn't impact revenue. I don't disagree with you there. However, realistically this is hard to pull off without sending signals that the ship is sinking and everyone should just go elsewhere.
Unless your costs are greater than 2 billion? I mean then you could make 2 billion in revenue and not turn a profit. ( 2 billion - (# greater than 2 billion) ) = (negative #). This is a very basic concept.
Twitter hasn't done anything wrong. They didn't drive the price up. Twitter doesn't set its stock price, at least not after the IPO. From that day it was in the hands of investors. They drove up the price. They should only blame themselves when it falls back.
This stock appears to be the high-beta canary-in-the-coalmine for the rest of tech.
Tech in general has been cut a lot of slack in the past 10 years by the market. Anyone with a dream and a disruption pitch was given the benefit of the doubt. Now the sector is having to compete like the rust belt. If you've got a flaw in your management, your busines plan, your execution, or you have a gap in your barriers to entry, you're being punished like the rest of 'em. Twitter Exhibit A. It has screwed up on monetization, too free for too long, too many hesitant initiatives, not enough killer instinct ("not enough Zuck", or if you like, "not enough Bill Gates"). It's the weak giant being taken down, SOTC-style. It's 2015's Lotus Development Inc. But it's not alone: AAPL stock performance is also being cut no mercy here on even a minor shipments hiccup. AAPL is looking IBM-circa-1990. At that time IBM was the only non-oil company in the Fortune 500 top-5.
It doesn't help that Chinese demand is tanking - the tech waterline is going downwards and the shipwrecks are starting to show.
The reason both Twitter and Google+ are struggling to grow their user base, IMO is because many folks I have talked to - find both products difficult to understand and use. Surprisingly most normal folks don't really get what "follow" means, and the slightly arcane terminology of twitter. The learning curve is a bit steep - and most users sign up, hang around for a while, don't really invest in discovering and following the right people, and soon just give up and never come back. The same is true for G+ - as in both cases your experience is defined by who you follow. Facebook got this right - as the simple concept of a "Friend" request translates perfectly to the real-world analog of making friends. While Follow is an abstract, invented concept with no real-world analog.
That together with the torrent of noise and information on Twitter, and no good tools to filter and manage the feed efficiently, make Twitter a tough product to use even for experienced users. I personally love Tweetdeck - and have managed to tame the newsfeed with lists etc - but it is still tiresome and inefficient.
> Surprisingly most normal folks don't really get what "follow" means, and the slightly arcane terminology of twitter. The learning curve is a bit steep - and most users sign up, hang around for a while, don't really invest in discovering and following the right people, and soon just give up and never come back.
Question, do these people who find it hard to grasp how twitter works have facebook accounts? As facebook is way more complicated than twitter is (which is just a textbox, a submit button and that's basically it).
Yes, every one of these folks - mostly friends and family - has a Facebook account and are active users of Facebook. It is not the simplicity of having a textbox and a submit button that matters in this case - they all know how to post a tweet. It is that once they do that - nothing happens. In FB - a post often immediately gets a reaction - a like or a comment - even if they have only a few friends. The stuff you post on FB is not as transient - while your Tweet most likely disappeared in a few seconds from the timeline of your followers.
>As facebook is way more complicated than twitter is (which is just a textbox, a submit button and that's basically it).
The problem with Twitter is exactly that it's a text box and a submit button. Following 0 people and with 0 followers what is my Mom supposed to type into that text box? That's what new users see when they create an account, literally nothing.
On Facebook you just add the people you know and talk to them like you usually do. On twitter you can't even find the people you already know.
I predict that Twitter revenue will grow as iOS 9 is released. iOS 9 will cause mobile advertising to undergo a paradigm shift as app-centered advertising becomes more important than website-based advertising. This will lead to increased ad dollar spending on Twitter.
IMHO a lot of people stop with twitter because they don't get the right social circle going: they follow a bunch of people but don't gain much followers and who they gain aren't really engaging in any activity, so it feels as if they're posting text in a document they store on their own computer: no-one really sees it nor cares.
Twitter has the downside that it's really 'in the moment': stuff that's tweeted now is interesting now, not tomorrow. This gives a problem with people who open twitter occasionally: they're likely not on twitter when something happens IRL and everyone's tweeting about it. With Facebook this is different, as things aren't really 'in the moment', or at least aren't depending on that that much: it's perfectly fine to read someone's post 2 days after it's been posted.
The whole point of Twitter is to know what's going on in the world of people and things you're interested in, BUT, and perhaps more importantly, IMHO foster conversation. The latter is completely opaque to someone who is new to the service. Conversation threads are buried under a click/touch and even then, it's hard to parse it.
I think the best thing Twitter could do is to downplay the importance of favorites and retweets (though they are important for growth but are a proxy for ego boost for the average user and not easy unless you're popular or important), and make the replies and conversations to a tweet/news story more prominent and "always-on" (with some limit of course, lest you see 500 replies to a Britney Spears tweet -- but then again, if you're following someone like that, may be you want to know what people are saying about it).
Engage more people in the conversation and surface it better. New users will have a much better grasp on what Twitter is if they do this.
I'm surprised Twitter's stock has floated as long as it has. While Facebook has diversified into different, successful, products and platforms, Twitter has stagnated, fumbled around and underwhelmed. Much like Yahoo. Perhaps I'm just a bit cynical and biased against Twitter though. I find the mostly arbitrary 140 char limit, 6 second video communication concepts a cute gimmick that will eventually tire.
I wouldn't be surprised when the tech bubble bursts, these social media experiments will be the first to fall back to earth. Any significant slashing of advertising budgets (due to e.g. macro economic affairs) will seriously strain the revenue model (and investor patience) of these services.
YMMV? I have much more business engagement on Twitter than Facebook. FB could disappear tomorrow for all my business cared, but I would certainly notice Twitter not being around.
Part of Twitter's problem is a mismatch between people who hold the largest megaphones compared to people they need to stick-around if their user growth is to continue.
People with millions of followers probably don't need to interact with any of them, but will maintain or grow their follower count through whatever celebrity got them their original following. They'll likely get retweets and replies to virtually everything they post - but may not even read any of it.
On the other side of the spectrum, people just starting out on the platform probably have few or no followers, nor are they likely to immediately find the people posting about content they want to follow. It's like walking into a party where everybody is already 3 or 4 beers deep and trying to join the conversation.
Twitter seems to think the answer to this problem is to encourage you to follow Barack Obama or Katy Perry, which seems like a really stupid suggestion if you're trying to show a new user that they can use their platform to establish networks of people interested in similar things that keep you coming back.
Most users will never get any personal reply from either Barack Obama or Katy Perry ... so maybe Twitter should research how to push new users towards people more-likely to reply. Once you find people you can corespond with on their platform, it establishes a natural hook to encourage you to return.
By lining up virtual "nobodies" with the most famous celebrities on the planet they're setting new users up for disappointment unless those users invest time finding the right people to interact with.
Another thing I'm thinking of is how authentic are the users? Is Katy Perry really Katy Perry or is she a team of ghost writers? That really turns me off about Twitter. Likewise I'm very impressed when the actual account owners tweet but who knows, It still might not be them.
As for new user onboarding one thing that I think could work is if you get them to start searching for interests through their search functionality. That's how I found a lot of interesting accounts.
Twitter purports to be an advertising company. Can't they use some of that retargeting tech to suggest potentially interesting users to follow rather than sell stuff?
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[ 3.2 ms ] story [ 174 ms ] threadHere's an idea: gamify engagement for verified accounts. If you're a big enough personality to have a verified account, you must @reply to, say, 1% of your followers before you can write another naked tweet. Or you can buy tokens that let you tweet without forced engagement, price determined in part by your follower count.
For a normie like me, the novelty of seeing your favorite celeb or software hero or whoever on twitter quickly wears off once you realize they send tweets once in a blue moon and never reply. You might as well be on their mailing list instead.
Without that it would be nothing.
Clearly some exceptions would have to be made, e.g. for news agencies and such.
You can create the illusion of engagement, but that's all.
Note the lack of the word "Twitter" in the reply up until this sentence. It's not even about Twitter. It's just generally impossible.
I think that this is part of the reason why it's really the "illusion of engagement" and not real engagement. The elite will perpetually be separated from the masses... the specific medium may change, but the separation will persist.
At least, that's the illusion. And while there are plenty of "managed" accounts run by paid "ghost tweeters", there have also been enough embarrassing deleted tweets to show that at least some remarks are coming straight from the horse's mouth.
edit: apparently people didn't take too kindly to pointing out that not all tech companies are having a downward trend. Here are tech companies that are up compared to one year ago: $FB, $GOOG, $MSFT, $AAPL, $AMZN
The graphic shows the twitter bird in a freefall, but what's actually happening is the public markets traders worst nightmare, the bird is just flying straight on.
The real problem is core to the product (it's really hard to become an active user), and one that's both really difficult and really time-consuming to solve.
I still think there's a good chance of a turnaround for Twitter. It's widely used by the media and celebrities. If they come up with a better way to consume this then I think they have a good chance of getting back to their recent highs in their stock.
And I agree with your second point. Their current level of network effect / lock-in should give them plenty of runway to find new ways to grow and/or monetize.
You don't deny the power of the platform, network, and brand themselves, right? I forget the buzzword for this type of non-fungible, unique asset. I guess we just wait and see what sort of valuation it fetches in an acquisition.
I don't see a good alternative channel to Twitter right now. Facebook certainly isn't it. Instagram definitely sliced out some of Twitter's market, but can't do the same in other use cases. Neither can Snapchat.
From the standpoint outgoing traffic Facebook dominates Twitter. That is a concern. Fake traffic or real, this is a signal of engagement.
Another problem is ad platform dominance. Advertisers will spend on well built platforms with large audiences. Google and Facebook clearly excel in this area now. It isn't so much Google & Facebook that threaten Twitter but all the other social apps and sites which are banking on the exact same model to justify their valuations. If Twitter is earning 1/3rd or 1/4th of the amount per user Facebook is in the long term this could be a problem.
There is a price where Twitter becomes a very strong acquisition target. It certainly is heading in that direction.
It always takes me by surprise. For example when Amazon finally split their revenue to show how much their cloud offerings were making the stock jumped by 18%. How is that even possible? They have a cap of 250B one confirmation of something any geek with a calculator could've estimated makes the company jump 50 billion dollars.
You can tell me TWTR was accurately 2 years ago, and it's accurately priced today, but I can't believe it was accurately priced friday.
(I'm long in AMZN and totally surprised by the windfall)
https://news.ycombinator.com/item?id=9937778
I've been pretty negative on Twitter for a while. I just don't see what they offer to justify their valuation.
They have an estimated P/E of 87 and yet they aren't growing. On the other hand their short interest is growing:(
TweetDeck is awesome. Their real time news is awesome. Their main website is awful. It's like a worse myspace.
Twitter, find a way to clean news data and deliver it to me in under a second identified with sentiment and stock ticker and I'll pay.
Short answer I got it from my bloomberg terminal.
Long answer.
P/E is different from estimated( or forward) P/E. See https://en.wikipedia.org/wiki/Price%E2%80%93earnings_ratio
They aren't equivalent in the same way that user growth and revenue growth are not equivalent to profit growth. A misinformed statistic for a misinformed view of how to build a successful business.
A miscommunication platform. #DescribeTwitterIn3Words
Usually you have to juggle chainsaws for a similar rush.
This is why I hate people doing things like tweetstorms.
People very often work around it by creating a string of tweets to build long(er) form posts. It's mostly arbitrary right now and people who wish to use the service for longer content have to do so in a stupid way.
It's not as though there's an actual limit, it's just an extra step to take if you wish to produce more verbose content.
It was probably a combination of things at the time, but the important question is now, nine years on, is there a better way for Twitter to use its position?
Innovator's dilemma.
you have reddit for that kind of discussions.
twitter is just really for 1:n-communication, to give your followers an update. don't try to change the way a social network works, just use another one which suits your needs.
The value of twitter is directly correlated with the time and effort they put into curating their personal feed. Power users do that all day long; most new users don't, never see the value, and leave the service.
That's probably 99% of Twitter's problem right now. It's so hard to see the value in Twitter if you don't invest a lot of time and effort.
I'm in the same camp as a few other commenters. It seems that Twitter's value is really in being a broadcast platform for big names. I don't think there is a viable contender out there. That population is finite, and "followers" can be passive consumers. I'm not sure that there is going to be much growth in the user base, and I think that's a natural property of twitter. I think it's still valuable and can be relevant for quite a long time.
Why does Twitter deserve six or seven times the valuation that Groupon is getting? Especially given Twitter's user growth has fallen off a cliff. Of course they're in different segments, but financial results are all that matter ultimately. My opinion: they don't deserve the valuation, the market has realized it, and will continue to deflate their extreme valuation, eventually over-correcting due to negative sentiment. They're worth $5 to $10 billion today.
On the bright side for Twitter, Google will probably buy them after their stock sinks further.
While companies are making real money, Twitter like companies are creating the Bubble chatter this time.
I don't think twitter's discourse ever helped anyone, any group, or any society.
Can someone brighten my day and tell me a way twitter has helped us, somehow?
I bring this up because of the stock market crash having such ridiculous effects from the great depression era. Though I may just be uneducated on what really happened.
However, the owners of the company might get together and force the board of directors to do something, like fire the CEO. The CEO, who probably has a lot of compensation as stock or options, would like price to be higher, so he is likely to take actions to get the stock price higher. Such actions may or may not be wise, and may or may not be helpful for the company. Frequently they aren't...
Tell that to the employees holding options. Those options are likely worthless if the stock price goes down.
TWTR will likely be marked as a turning point for the 'tech bubble 2.0' when tech companies get put in two camps. Those that are real business and those that are not. I don't think we're in a 1999-esque tech bubble but there are a lot of hyped up companies that aren't real businesses that need to get washed out of the system.
Overvalued, maybe. But that's real cash.
Twitter's going down :(
http://www.wsj.com/articles/twitter-debt-rated-as-junk-14159...
to a healthy one in less than a year.
Can you please provide a link to the balance sheet you saw?
Issuing debt does not mean a company is "drowning in debt". The term "junk" debt does not mean a company is "drowning in debt". If a company has more cash on balance sheet than debt, it's net debt is negative. When they issued this debt they had negative net debt. Now they have negative net debt. They were not, are not and have never been "drowning in debt". Promoting false information about a public company is potentially illegal.
So to suggest they are "drowning in debt" only shows no understanding of simple financial matters, and little regard for securities legislation. Not all opinions are valid.
You can have a business that tells people that if they give you a dollar, you'll give them $1.50.
Twitter right now (oversimplified) generates $2 billion in revenue by giving away $3 billion. Of course they could try tightening their financial belts, but that'd probably hurt their growth.
Not sure if you know it, but that is clearly not Twitter's business model.
Twitter's costs are mostly fixed, so if it can generate $3B in revenue, it will be profitable.
If management consistently can't find a way to make that level of revenue without spending far more each year then yes it's not a real business.
If I bought iPhones at full retail and then sold them for less than I paid I'm sure I could quickly rack up tons of revenue... but this wouldn't be a real business. It's this concept that a lot of 'tech' companies struggle with and why their execs want to focus on 'user growth' and 'revenue' and not normal metrics like 'profit' and 'cost of goods sold.' The later is where it gets real ugly.
Yes, there's a 'ramp up period' where costs outweigh revenue, but Twitter has run out of runway. There's no clear sign of how they'll increase revenues to justify their cost of generating that revenue. They could start a slash-n-burn operation but everyone will just read that as the company going under and people will ditch the platform faster than MySpace.
> If management consistently can't find a way to make that level of revenue without spending far more each year then yes it's not a real business.
Could Twitter fire most of its developers and sustainably turn a profit? Yes, it absolutely could. Hell, I could do that. "Sales people, keep doing the same thing. All this other expensive overhead is gone." But instead the executives choose to invest the company's would-be profits (and a little more) back into the company, in hopes that they will be even bigger later on. And they're still growing (at a rate faster than expenses are), even beating analyst expectations to this point. The stock drops because analysts are concerned this won't continue to be the case (Wall Street is weird).
In a very real way, the only time big tech companies start turning a profit is if they think they are reaching the peak of the revenue they could generate. Until then, it's time for growth. That growth is still very valuable, they're just hot taking profits yet. http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...
Hence, if you're looking at every company to determine if it is profitable or not, you probably come away with a very misleading, "The world is doomed" view of the economy. Companies aren't taking their chips down yet, because they're still confident they'll grow.
It seems counter-intuitive, I know, but that's the reality of how companies act, in order to maximize the profits long-term.
Indeed their only real option at this point is likely to start slashing cost and hope it doesn't impact revenue. I don't disagree with you there. However, realistically this is hard to pull off without sending signals that the ship is sinking and everyone should just go elsewhere.
Even if they are not doing it, others certainly are for various reasons. I have always wondered what the true user count is.
Tech in general has been cut a lot of slack in the past 10 years by the market. Anyone with a dream and a disruption pitch was given the benefit of the doubt. Now the sector is having to compete like the rust belt. If you've got a flaw in your management, your busines plan, your execution, or you have a gap in your barriers to entry, you're being punished like the rest of 'em. Twitter Exhibit A. It has screwed up on monetization, too free for too long, too many hesitant initiatives, not enough killer instinct ("not enough Zuck", or if you like, "not enough Bill Gates"). It's the weak giant being taken down, SOTC-style. It's 2015's Lotus Development Inc. But it's not alone: AAPL stock performance is also being cut no mercy here on even a minor shipments hiccup. AAPL is looking IBM-circa-1990. At that time IBM was the only non-oil company in the Fortune 500 top-5.
It doesn't help that Chinese demand is tanking - the tech waterline is going downwards and the shipwrecks are starting to show.
Question, do these people who find it hard to grasp how twitter works have facebook accounts? As facebook is way more complicated than twitter is (which is just a textbox, a submit button and that's basically it).
The problem with Twitter is exactly that it's a text box and a submit button. Following 0 people and with 0 followers what is my Mom supposed to type into that text box? That's what new users see when they create an account, literally nothing.
On Facebook you just add the people you know and talk to them like you usually do. On twitter you can't even find the people you already know.
Twitter has the downside that it's really 'in the moment': stuff that's tweeted now is interesting now, not tomorrow. This gives a problem with people who open twitter occasionally: they're likely not on twitter when something happens IRL and everyone's tweeting about it. With Facebook this is different, as things aren't really 'in the moment', or at least aren't depending on that that much: it's perfectly fine to read someone's post 2 days after it's been posted.
I think the best thing Twitter could do is to downplay the importance of favorites and retweets (though they are important for growth but are a proxy for ego boost for the average user and not easy unless you're popular or important), and make the replies and conversations to a tweet/news story more prominent and "always-on" (with some limit of course, lest you see 500 replies to a Britney Spears tweet -- but then again, if you're following someone like that, may be you want to know what people are saying about it).
Engage more people in the conversation and surface it better. New users will have a much better grasp on what Twitter is if they do this.
My 2c.
A tweet gets maybe a few likes and retweets, but the linked instagram post has 500 likes & 25 comments within 30 minutes. That's quite alarming!
e.g: https://twitter.com/taylorswift13/status/626084866631667712 18k likes on twitter, 866k likes on instagram.
let these numbers do the talking.
I wouldn't be surprised when the tech bubble bursts, these social media experiments will be the first to fall back to earth. Any significant slashing of advertising budgets (due to e.g. macro economic affairs) will seriously strain the revenue model (and investor patience) of these services.
People with millions of followers probably don't need to interact with any of them, but will maintain or grow their follower count through whatever celebrity got them their original following. They'll likely get retweets and replies to virtually everything they post - but may not even read any of it.
On the other side of the spectrum, people just starting out on the platform probably have few or no followers, nor are they likely to immediately find the people posting about content they want to follow. It's like walking into a party where everybody is already 3 or 4 beers deep and trying to join the conversation.
Twitter seems to think the answer to this problem is to encourage you to follow Barack Obama or Katy Perry, which seems like a really stupid suggestion if you're trying to show a new user that they can use their platform to establish networks of people interested in similar things that keep you coming back.
Most users will never get any personal reply from either Barack Obama or Katy Perry ... so maybe Twitter should research how to push new users towards people more-likely to reply. Once you find people you can corespond with on their platform, it establishes a natural hook to encourage you to return.
By lining up virtual "nobodies" with the most famous celebrities on the planet they're setting new users up for disappointment unless those users invest time finding the right people to interact with.
As for new user onboarding one thing that I think could work is if you get them to start searching for interests through their search functionality. That's how I found a lot of interesting accounts.