Growth Rates Don't Matter: How Userbases Don't Always Confer Profit(techgeist.net)
techgeist.net
Growth Rates Don't Matter: How Userbases Don't Always Confer Profit
http://techgeist.net/2009/04/growth-rates-dont-matter/
14 comments
given the current txt message rates, the cost of sending a txt message might be on par with streaming a video
Who still uses Twitter via SMS? Out of those people, who receive tweets via SMS (the ones Twitter would have to pay for)?
They cut that for a lot of countries, yet they say they can operate for years. Why not spend that money they are sitting on with innovating their service, creating features that can actually make money.
"Good for Twitter, but this will not translate into any money for Biz Stone, one of the site’s founders, until the microblogging platform is monetized."
Umm, tell that to the YouTube guys (ironic given that that is the example he uses to make his point). There's no law that says your company has to turn a profit before anyone can buy it.
Umm, tell that to the YouTube guys (ironic given that that is the example he uses to make his point). There's no law that says your company has to turn a profit before anyone can buy it.
In the microeconomic sense you're right, in the macroeconomic sense you're wrong.
Selling off a company based on users that aren't monetizable is basically a ponzi scheme that just passes the buck to the next idiot in line until it all collapses.
Selling off a company based on users that aren't monetizable is basically a ponzi scheme that just passes the buck to the next idiot in line until it all collapses.
This might be the truest statement I've read all day
It's not really a Ponzi scheme because the next guy down the line might find value in it. Ever since Madoff, everyone has inaccurately referred to everything as a Ponzi scheme. It's not.
And even if it were, that quote would still be stupid because founders who don't monetize get rich all the time.
And even if it were, that quote would still be stupid because founders who don't monetize get rich all the time.
Except we're not talking selling a site, we're talking about actual operating profit.
Actually we're talking Biz Stone's bank account.
Good point re: Youtube, but the fact that eBay thinks they can spin Skype off into an independent company implies that it's profitable or near to it.
edit: A little digging confirms it -- http://www.pehub.com/37158/is-skype-profitable-now-we-know-y...
edit: A little digging confirms it -- http://www.pehub.com/37158/is-skype-profitable-now-we-know-y...
Quality > Quantity.
Big Quantity of Quality > Small Quantity of Quality
Big Quantity of Quality > Small Quantity of Quality
Big Quantity of Quality >> Small Quanity of Quality
(much much greater)
Uninformed choice of examples: Skype is very profitable. (See the link aston provided.)
Twitter, on the other hand, sends 140 character messages back and forth. Yes, they've had scaling issues, but that's because they blew up from a tiny operation into a major success overnight without the manpower to handle the growth, not an indication that their costs are too high. If they flip pretty much any monetization switch, they'll become profitable quickly.