In November 2013 I asked “Should we short Twitter?” The company was then valued at $18 billion.
Today the market cap is $12 billion (chart) and the Wall Street Journal is writing about desperate management changes (article).
At first glance it would seem that questioning Twitter’s value was a good investment idea. However, the price roughly doubled after I asked the question so a short investor would have needed capital, patience, and nerves to hang for more than two years.
Readers: What could Twitter do to earn more revenue and profit?
What is their value apart from eye witness video faster than CNN?
They don’t do family communication well: facebook
They don’t do team communication well: slack, email,
They don’t do friend communication well: facebook, what’s app, g+, sms
They don’t do rss feeds well.
All they do is the lowest form of entertainment chatter with an occasional peppering of breaking eyewitness accounts and video.
To earn more revenue perhaps they should get into prison communications:
http://www.ibtimes.com/amid-death-threats-embattled-prison-phone-company-ceo-speaks-out-2276551
No. Unless our name is Soros or Einhorn, we should not short anything. The term “short investor” should be banished from the English language. That said, Twitter is not a very attractive investment. My kids seem to be pretty bored with Facebook as well though I read that FB is selling a lot of ads.
I didn’t answer the question asked. To earn more profit they should probably sell their servers and buy a zero-turn radius mower for each employee and maintain the lawns of Facebook employees.
Given the state of public accounting principles in this new era, I question whether Twitter is really making any profit whatsoever.
Twitter should offer an option to pay for using its API for small businesses, and, in this way, increasing the API limits This is a no-brainer that Twitter always denied in favor of companies who can afford a more expensive package.
In another context this was one of the smartest moves of Google AdWords while other companies (e.g: Yahoo) required to buy an expensive minimum package upgront.
There are a lot of companies looking to peek in Twitter feeds but can’t afford the expensive prices. Also, Twitter was at war with companies using their API.
Having had the misfortune to have worked there (and get unjustly ripped off), I think the place has two fundamental problems, one of which is well-known (flat user growth/new products not sticking and existing product getting stale) and one of which isn’t unless you pay attention to folk who’ve worked there.
The more open face of the problem is that Twitter has in general horrible middle management. Of the six managers I had to deal with in my tenure there, five were the worst I’ve ever had. The developers were decent to good, but the management had problems top to bottom. Note that the upper management has been a serious revolving door since before Dorsey came back. Also, read the negative Glassdoor reviews (and note there’s a fair amount of presumably Twitter HR driven cruft in the very positive ones on the order of “I’ve been here a whole two days and it’s just fantastic!!!!”); bad management is the common thread.
My conclusion, and the lesser open face of the problem, is that Twitter was founded by bad managers who also didn’t know how to hire good ones. And this propagated down the chain by the hires made by the managers they did hire. What they really need to do is hire someone HRish who does know what good managers are and how to hire them, who’s then authorized to do surveys and rip out the bad apples en masse.
Twitter should add a separate metadata field for every tweet. Better metadata is what is missing on Twitter and what could make the service immensely more useful for everyone. Hashtags are chicken scratches written on a cave wall.
I explain some of these metadata ideas in this short YouTube video.
and in this longer PCWorld blog post from several years ago.
http://www.pcworld.com/article/248707/when_metadata_comes_to_twitter.html
To reach deeper understanding, Twitter needs a Chief Listening Officer, because if you’re not listening, you’re not learning. And the Chief Listening Officer should probably be the CEO. And if the CEO is half-vast, then you have a half-vast company hobbling along as a central communication channel in a knowledge economy.
Which maybe ain’t so good for the knowledge economy.
@Tom
One reads that Twitter has almost 3,000 employees. What the heck do they all do? I would have thought there’d be way under 1,000. The technology challenge doesn’t seem super complicated to me in today’s world (it probably was harder eight years ago).
@bobbybobbob @tom
Yeah, for a platform optimized to distribute 140 character messages, what are the 3,000 employees doing?
Twitter has this platform with no real idea how to monetize it. It can be difficult for a company to move up the value chain though. Twitter has previously burned developers, so as suggested above they probably could do better. Also, it might shock investors, but I think Twitter also should clean up the huge numbers of spam accounts.
Before we start, nothing says a useful service like Twitter also is a great business idea. Who got rich off email after all? With that out of the way:
I haven’t really followed Twitter recently, but my impression is they have a strong position with various media, companies, celebs, etc. There should be some way to upsell to those guys.
Twitter also works as cheap marketing for tiddlers, like D-list celebs, artists, local businesses and organizations, etc. This segment seems to be served mostly by spammers today. There should be a better product for them too.
Also, I would guess many users simply want an interesting feed of messages to start with and prefer to leave the sending of snide angry messages for later. Has Twitter solved this “passive user” experience yet? Presentation of the feed was a big problem a while ago.
Maybe they could offer 280-character premium messages.
To avoid confusion, I’m not the Twitter-employed Tom.