Twitter’s User Growth Goes Nowhere as It Meets Revenue Expectations of $710M(techcrunch.com)
techcrunch.com
Twitter’s User Growth Goes Nowhere as It Meets Revenue Expectations of $710M
http://techcrunch.com/2016/02/10/twitters-user-growth-goes-nowhere-as-it-meets-revenue-expectations-of-710m/
15 comments
Why on earth is wall street so hung up on user growth? Don't they still have a ton of monetization opportunities? I see no where near the amount of ads as facebook and I hear their ad targeting is pretty bad right now and despite all this, their revenue isn't bad at all.
The price reflects the future prospects of Twitter, and a poorly-monetised Twitter with a shrinking user base is worth less than a poorly-monetised Twitter with a booming user base.
Put another way, they used to be hosting a huge party and just had to work out how to turn that into cash. Now people are starting to leave the party, making cash less of a concern at that point.
Put another way, they used to be hosting a huge party and just had to work out how to turn that into cash. Now people are starting to leave the party, making cash less of a concern at that point.
I think this pretty much nails the wall street perspective. Interestingly enough I left the party because their attempts to monetize were really invasive; Emails, many notifications on my phone, etc... I think some subset of their users (to which I belonged) appreciated the simplicity of the product. Their attempts to increase engagement decreased it with what appears to be a significant portion of their user base.
I never quite got Twitter. It just seemed like a giant celebrity circle jerk. Especially for celebrity tech people. And I just don't give enough of a shit about famous or prominent people for it to matter much.
Honestly, I'm positively perplexed by this comment.
Twitter allows me to follow writers and influencers like Malcolm Gladwell, William Gibson, Edward Snowden, Glenn Greenwald, to niche industry influencers ranging from Rails engineers to industrial designers to photographers in a way that is digestable and at times personal. To me, it's been edifying to read thoughts from them, discover work they've created as it happens, or find out about a book they recommend.
Twitter is literally what you make of it. Follow interesting people, you get interesting content.
Twitter allows me to follow writers and influencers like Malcolm Gladwell, William Gibson, Edward Snowden, Glenn Greenwald, to niche industry influencers ranging from Rails engineers to industrial designers to photographers in a way that is digestable and at times personal. To me, it's been edifying to read thoughts from them, discover work they've created as it happens, or find out about a book they recommend.
Twitter is literally what you make of it. Follow interesting people, you get interesting content.
Your comment is very reasonable but I've found that celebrity or wits or intelligence hardly correlates to interesting Twitter stream. Basically, most people who tweet are a waste of time to read. Even at 140 characters at a time.
It's surprisingly hard to find people who consistently say interesting things in such a restricted space.
Overall, I've decided it was so hard that it just wasn't worth my time, so I no longer read Twitter at all.
Obviously, your mileage may vary.
It's surprisingly hard to find people who consistently say interesting things in such a restricted space.
Overall, I've decided it was so hard that it just wasn't worth my time, so I no longer read Twitter at all.
Obviously, your mileage may vary.
I too have felt the same way. I occasionally check John Carmack's twitter or some other developers, but that's it.
and when he was around I loved https://twitter.com/devops_borat
It is, indeed, what you make of it....I agree...
I know that the next day, or the day after that, worst case scenario, anything immediately relevant to me, or my community, will appear in my local newspaper, or RSS feed...
I live locally, in the short run, globally in the long run...
That's what devalues Twitter to investors...it's just "entertainment...it can easily be given up, without any real consequences...there are other more refined sources for what it offers...
I know that the next day, or the day after that, worst case scenario, anything immediately relevant to me, or my community, will appear in my local newspaper, or RSS feed...
I live locally, in the short run, globally in the long run...
That's what devalues Twitter to investors...it's just "entertainment...it can easily be given up, without any real consequences...there are other more refined sources for what it offers...
Basic rules
* Never follow accounts with blue checkmarks.
* Take the words of very popular accounts (even if they have no checkmark) with a grain of salt.
* Use your account to converse or pontificate, not to advertise your personal brand.
* Avoid jokey one-upmanship. It is tedious.
* Avoid detailed explanation until prompted. Brevity makes for misunderstandings.
* Follow people you do not know personally.
* Follow artists.
* Follow journalists.
* Follow minorities.
The reason to use Twitter is to get perspectives that have no other outlet - no advertising, no backing, no organization behind them. These are voices that are so faint that they could be tuned out any other way, and they don't get covered in the paper the next day, because they're going outside of the narrative lines. That is why you do better avoiding the blue checkmarks and people who would strive for them.
* Never follow accounts with blue checkmarks.
* Take the words of very popular accounts (even if they have no checkmark) with a grain of salt.
* Use your account to converse or pontificate, not to advertise your personal brand.
* Avoid jokey one-upmanship. It is tedious.
* Avoid detailed explanation until prompted. Brevity makes for misunderstandings.
* Follow people you do not know personally.
* Follow artists.
* Follow journalists.
* Follow minorities.
The reason to use Twitter is to get perspectives that have no other outlet - no advertising, no backing, no organization behind them. These are voices that are so faint that they could be tuned out any other way, and they don't get covered in the paper the next day, because they're going outside of the narrative lines. That is why you do better avoiding the blue checkmarks and people who would strive for them.
Last night I engaged an A16Z partner over net neutrality and Free Basics in India. Nothing circle jerk about it. No other platform offers this kind of engagement. I really wish Twitter wasn't public so all this money pressure wouldn't exist. It should be run like Wikipedia.
Don't follow any celebrities.
Me neither, and not for lack of trying either. I've posted thousands of tweets. It was most interesting during breaking news events. But it never seemed useful enough to justify my time expenditure in it, so I gave up.
And anything really interesting on Twitter gets liked from Reddit, so no need to follow Twitter independently.
Interesting. I receive no emails and rarely any push notifications from Twitter. I use it every day while riding the bus, although I'm mainly a consumer and hardly tweet anymore.
Did you and I fall into different categories or something and somehow that led to you receiving invasive marketing where as all I ever see are a few promoted tweets? Pretty curious about this because you mention that your experience is happening to a large portion of the user base.
Did you and I fall into different categories or something and somehow that led to you receiving invasive marketing where as all I ever see are a few promoted tweets? Pretty curious about this because you mention that your experience is happening to a large portion of the user base.
I used to receive multiple push notifications a day at a minimum, which was irritating to me because prior to this a push notification meant that someone was interacting with me, and that didn't hold true anymore. Twitter had broken that implicit contract with me.
As for what I had said in the parent comment, what I was trying to imply was that something has happened recently that has disengaged a significant (different than large portion, specifically meaning not insignificant) portion of its user base as evidenced by the deceleration in user growth. Apologies for any confusion. :)
As for what I had said in the parent comment, what I was trying to imply was that something has happened recently that has disengaged a significant (different than large portion, specifically meaning not insignificant) portion of its user base as evidenced by the deceleration in user growth. Apologies for any confusion. :)
My mental model jumped from significant to large too easily, sorry about that.
What notifications were you seeing? I'm trying to think what I would receive that wasn't another user interacting with me and all I can recall is something along the lines of 'User1, User2, ..., all liked User3's Tweet' where User1 and User2 were people I followed. But it was very strange because every now and then I get those notifications for high profile accounts and other times it would be like two friends liked a third friends tweet. Those notifications were quite sporadic though and don't bother me in the least.
What notifications were you seeing? I'm trying to think what I would receive that wasn't another user interacting with me and all I can recall is something along the lines of 'User1, User2, ..., all liked User3's Tweet' where User1 and User2 were people I followed. But it was very strange because every now and then I get those notifications for high profile accounts and other times it would be like two friends liked a third friends tweet. Those notifications were quite sporadic though and don't bother me in the least.
> Those notifications were quite sporadic though and don't bother me in the least.
It probably depends on who you follow and how connected they are. I get these notifications sometimes multiple times a day.
It probably depends on who you follow and how connected they are. I get these notifications sometimes multiple times a day.
You can disable them in the settings. No?
Twitter was pushing text from people I didn't follow to my phone's lock screen.
Only visit occasionally now.
Only visit occasionally now.
Their Android widget used to show the latest tweet of a person a follow. Recently (few months, maybe?) it was only the most recent ad. I'll be damned if I dedicate a chunk of my home screen to whatever crappy ad Twitter wants to fling at me.
Some products are chosen, by consumers, because of one thing...simplicity...an easily intuitive UI, use-ability..the product fills a need, just as it is, when introduced to the market...
Scaling up is difficult for such products...
It doesn't matter to consumers that a business needs to monetize...they don't care; they weren't even aware that it needed to...they are satisfied with the product they know, as is...
This is something we in the industry get wrong, so often...
Scaling up is difficult for such products...
It doesn't matter to consumers that a business needs to monetize...they don't care; they weren't even aware that it needed to...they are satisfied with the product they know, as is...
This is something we in the industry get wrong, so often...
Notifications and emails are completely configurable in about 30 seconds. You can get as little or as much as you want.
That's 30 seconds too many because I didn't ask for them in the first place.
Exactly. I'm used to unsubscribing from some random newsletter every company inevitably signs you up for but with Twitter it went from occasional emails to suddenly subscribed to 20 different notification-types (on all 3 of my Twitter accounts) delivering everything from daily "summaries" to every random follow I get.
Seems like they (and a lot of SV) need to figure out ways to monetize other than ads.
I can tell you the easy answer to that problem: micropayments.
Look how much people will spend on Android apps when they're a dollar or three. Make things really cheap, and people will buy them: they'll do a lot of impulse purchases when things are cheap enough.
If news articles only showed you part of the article, and then demanded $0.02 to read the rest, I could see a lot of people paying that. Considering how little they get paid for ad impressions (fractions of a cent), direct payments like that would be more profitable, and readers wouldn't care that much about spending pocket change on it.
But there's no way to make a functioning micropayment system currently. It's not feasible to have credit-card payments for sub-$1 transactions because of the high per-transaction fees, and Visa/MC have a cartel going where you have to use them for any kind of credit/debit payments.
SV needs to figure out how to make easy, low-fee micropayments a reality, and then we'll see some change.
Look how much people will spend on Android apps when they're a dollar or three. Make things really cheap, and people will buy them: they'll do a lot of impulse purchases when things are cheap enough.
If news articles only showed you part of the article, and then demanded $0.02 to read the rest, I could see a lot of people paying that. Considering how little they get paid for ad impressions (fractions of a cent), direct payments like that would be more profitable, and readers wouldn't care that much about spending pocket change on it.
But there's no way to make a functioning micropayment system currently. It's not feasible to have credit-card payments for sub-$1 transactions because of the high per-transaction fees, and Visa/MC have a cartel going where you have to use them for any kind of credit/debit payments.
SV needs to figure out how to make easy, low-fee micropayments a reality, and then we'll see some change.
I would gladly pay a premium if they'd add some fricking features to Twitter and TweetDeck, and I bet I'm not the only one. Just one example, I'd like in TweetDeck to have more visualization options, as well as powerful filtering capability. I get a tweet about every 30 seconds and I would like to have the capability to have some of those go into a "must read later" bucket. That would take a good developer 2 to 8 weeks, lots of people would use it and love it and likely be happy to pay for it, Twitter has all sorts of developers and money, but how often do they release features that are useful? Instead we get some sort of "important" (according to their algorithm if I'm not mistaken) tweets abomination.
Hey I'm not saying these are necessarily awesome ideas, but if your ship is showing signs of starting to sink, doing crazy things like adding features to your product may not be all that crazy.
Hey I'm not saying these are necessarily awesome ideas, but if your ship is showing signs of starting to sink, doing crazy things like adding features to your product may not be all that crazy.
Any intermediary will face the issue of having user deposit an advance payment so micropayments can happen.
Unless one has balls enough to factor in debt in micropayments. You sign up users and make them agree to pay those .02 at a later time and when you're down five dollars the usets need to pay to continue. It's risky but with enough margin to cover the insolvents it could work
Unless one has balls enough to factor in debt in micropayments. You sign up users and make them agree to pay those .02 at a later time and when you're down five dollars the usets need to pay to continue. It's risky but with enough margin to cover the insolvents it could work
great plan!
Allegedly a Facebook user is worth $128 (http://www.forbes.com/sites/georgeanders/2014/02/07/youre-wo...).
Paying $5 to acquire a micropayment customer sounds cheap.
Allegedly a Facebook user is worth $128 (http://www.forbes.com/sites/georgeanders/2014/02/07/youre-wo...).
Paying $5 to acquire a micropayment customer sounds cheap.
> Wall Street right now is valuing the average Facebook user at $128 , a touch ahead of Twitter’s $118 — and far above LinkedIn’s skimpy $84.
Wow, I would say Twitter and Linkedin are vastly overvalued compared to Facebook.
Wow, I would say Twitter and Linkedin are vastly overvalued compared to Facebook.
Really?
I mean, linkedin has a legit monetisation strategy just as a socially connected CV platform for recruiters to find people - and charging recruiters for tools to use it effectively.
That seems far far stronger than what I know of twitter. Facebook - well what I really want to know is more detailed metrics like median time spent on it per user, interactions per user, etc etc. I'd be fascinated to know if the trends are downwards.
I mean, linkedin has a legit monetisation strategy just as a socially connected CV platform for recruiters to find people - and charging recruiters for tools to use it effectively.
That seems far far stronger than what I know of twitter. Facebook - well what I really want to know is more detailed metrics like median time spent on it per user, interactions per user, etc etc. I'd be fascinated to know if the trends are downwards.
Agreed. Facebook's entire monetization strategy seems to be just showing ads to people who waste their time there looking at stupid videos and posting stupid comments to them. That's pretty easily defeated with an ad-blocker.
LinkedIn's strategy is, as you said, a socially-connected CV platform so that recruiters can find people and hook them up with jobs, and make a big commission in the process, so LinkedIn charges recruiters a hefty fee for access to people. Ad-blockers aren't going to have any effect here: the recruiters still have to pay to send messages to people. It seems like a much more sound business strategy, as long as professionals still need jobs and there's recruiters looking to place them in jobs. It might not have the mass appeal of the inanity of Facebook or Twitter (since only a fraction of the population is of the demographic that would find it worthwhile to use LinkedIn; someone working as a barista or a Walmart cashier would not), but it certainly isn't subject to the same fickleness that those two are. All it'll take is some other inane social media platform to rise up for people to share dumb videos on and for FB/Twitter to do something dumb to piss off people, and suddenly they could become the next MySpace. LinkedIn's position is much stronger, as long as they don't screw it up trying to achieve the popularity of those other two.
LinkedIn's strategy is, as you said, a socially-connected CV platform so that recruiters can find people and hook them up with jobs, and make a big commission in the process, so LinkedIn charges recruiters a hefty fee for access to people. Ad-blockers aren't going to have any effect here: the recruiters still have to pay to send messages to people. It seems like a much more sound business strategy, as long as professionals still need jobs and there's recruiters looking to place them in jobs. It might not have the mass appeal of the inanity of Facebook or Twitter (since only a fraction of the population is of the demographic that would find it worthwhile to use LinkedIn; someone working as a barista or a Walmart cashier would not), but it certainly isn't subject to the same fickleness that those two are. All it'll take is some other inane social media platform to rise up for people to share dumb videos on and for FB/Twitter to do something dumb to piss off people, and suddenly they could become the next MySpace. LinkedIn's position is much stronger, as long as they don't screw it up trying to achieve the popularity of those other two.
Doesn't facebook get a share from facebook app profits?
No, it's not. Tech companies are values for growth, and while it's applicability is different to different companies, Facebook is still valued for growth.
This logic says a company in beta valued at $1 mil is worth $100k / user for the 10 beta testers. Not at all.
This logic says a company in beta valued at $1 mil is worth $100k / user for the 10 beta testers. Not at all.
And who are the assholes who down-modded me anyway? There's nothing controversial or offensive here. People have been wanting micropayments for many, many years now on the internet for the exact reasons I states above. Are there some Visa/MasterCard shills here or something?
The more users you have the more you can demand advertisers work with you to implement custom ad units or ad types. Since twitter seems to be focusing on promoted tweets and other twitter-only advertising methods, you really need a lot of scale to justify advertisers building custom creative for you.
That's entirely perception with no basis in reality. A million users who make you $10 each are worth the same as 10 users who make you $1 million each. It's worth it for Twitter and its investors to track users so they can see how to monetize them, but if revenue goes up its okay.
If making money ever isn't the main goal of a business, that truly are screwed.
That said, I've long believed that Twitter would be one of the first to fail when the tech bubble pops. They don't have a product people are willing to pay for.
If making money ever isn't the main goal of a business, that truly are screwed.
That said, I've long believed that Twitter would be one of the first to fail when the tech bubble pops. They don't have a product people are willing to pay for.
Quite simple: investors invested in a company that was going to grow exponentially. Now that it is not growing, they want out.
Which, IMO, is fine. I wish we lived in an environment where Twitter could say "we're making money, we're successful enough, invest if you like what you see", but Silicon Valley is frequently hockey stick growth or death.
Which, IMO, is fine. I wish we lived in an environment where Twitter could say "we're making money, we're successful enough, invest if you like what you see", but Silicon Valley is frequently hockey stick growth or death.
They aren't making money though. They're losing money. They are not successful enough.
Keep in mind that the major drag on profitability for many of these companies is labor/compensation costs and specifically the war for talent that Facebook started in 2011-ish. The 22 year old making $150k all in and their 27 year old boss clearing >$300k? That money doesn't come from thin air. Don't underestimate the degree to which the rank and file talent has benefited from the current ''bubble''. If enough downward pressure is exerted to depress salaries broadly across the board then a lot of these companies will benefit. Note that insofar as part of comp is paid in RSUs then this downward pressure is already being felt as public share prices decline.
Exactly. My only knowledge of Twitter is from a user standpoint, but I've racked my brain for years wondering why Twitter is larger than 100 employees. I can't figure it out.
Spreading risk and blame, pressure from investors to spend the big raise money, the diplomatic roles that become necessary at a certain size, R&D employees. Mostly political reasons, but reasons nonetheless
Because at X thousands employees: Too Big to Let Fail.
Neither can they ;)
However, if things deflate ad revenue is going to go into the toilet, it's largely funded by the same tech companies with huge marketing budgets.
I think a social network is slightly different from the other companies where that argument applies. The Internet was a fun place with 300m people on it, but growth made it better. Same with Facebook. People bring problems, but in general networks are better with more of them around.
Some crotchety old timers might argue that point.
https://en.m.wikipedia.org/wiki/Eternal_September
https://en.m.wikipedia.org/wiki/Eternal_September
As a crotchety old timer, I agree completely.
You'd take Usenet over everything else we got from the growth of the network, from Amazon to MP3s?
There's a lot of different distinctions to be made (or argued against) regarding the "who" of the network, rather than the "what".
I think HN comments would be a prime example that simpler-functionality-with-higher-quality-participants is a valued combination.
I think HN comments would be a prime example that simpler-functionality-with-higher-quality-participants is a valued combination.
I'd take fewer people online in general. The number of people that are glued to their smartphones because of all this supposed progress frightens me.
All companies grow exponentially. Any compounded growth is exponential. The k in e^(kt) can be anything. You perhaps meant to say, investors want way-better-than-S&P-and-in-line-with-APPL/GOOG/FB growth?
> All companies grow exponentially.
No, they don't.
> Any compounded growth is exponential
Not all growth is compounded in a way that fits an exponential curve. Sure, any single interval (two data point) growth will fit some exponential curve, but once you get a second interval, it may or may not fit (or be approximated by) any exponential curve.
No, they don't.
> Any compounded growth is exponential
Not all growth is compounded in a way that fits an exponential curve. Sure, any single interval (two data point) growth will fit some exponential curve, but once you get a second interval, it may or may not fit (or be approximated by) any exponential curve.
Unless you specify an error, all growth can be approximated with exponentials. In fact, by your logic, even investors don't desire exponential growth. Why specifically would they want the growth of their investments to follow the rule that the derivative of the revenue is proportional to the revenue? Investors surely wouldn't mind factorial growth :) . It is just that metrics like CAGR are convenient and very rough approximations of the reality, designed to make the concept of growth intuitively year-on-year. In reality companies don't grow exponentially, we use exponential models to define company growth. The exponential model is fully arbitrary, with the k being as small as you please (linear growth is sometimes even defined by low CAGR numbers like 0.1%, etc.)
> Why specifically would they want the growth of their investments to follow the rule that the derivative of the revenue is proportional to the revenue?
Well, I think more precisely they want the growth to be at least exponential; they'd be happy with super-exponential growth (increasing, rather than constant, k over subsequent intervals.)
They also want a minimum value of k.
Well, I think more precisely they want the growth to be at least exponential; they'd be happy with super-exponential growth (increasing, rather than constant, k over subsequent intervals.)
They also want a minimum value of k.
All companies? Surely some companies have linear growth.
Linear growth is not really growth, in a financial sense, as growth is when the derivative (rate of change) is increasing/decreasing. Linear growth by how I interpret it, would have a derivative of zero, i.e. the rate of change is constant, or geometrically speaking, a straight line.
Financial terminology doesn't distinguish between linear and exponential. Linearly growing companies would simply be assigned very low (close to 0 / positive) CAGRs.
I agree. For example, if you spend exactly $1000 on advertising a day, and have no network effects, you will get linear user growth.
The way you do valuations is using DCF analysis. They do some projection until a final year at which point they treat is as perpetuity with some growth rate. Here is the basic formula PV = FCF/(r-g). Where r is discount rate and g is growth rate. As you can see g is huge in the way companies are valued. For example for d=10% and FCF value of $10 million a growth rate of 1% would value the company at 111 million whearas a growth rate of 9% would value it at $1 billion. Almost 10x as much. That is why growth is so important to finance people.
This formula (the Gordon growth model), doesn't really apply here, cause the g is for perpetual growth. For example, if you plugged in FB's current growth rate, it would blow up to something ridiculously large. The rule of thumb is that it should never be larger than GDP (since that company would quickly come to dominate the national economy). Tracking inflation is safe if the company can at least raise prices to match inflation.
If you don't want to set up a full DCF, the Benjamin Graham formula gives a quick intrinsic value estimate:
V = E * (8.5 + 2g) * 1.1,
E is earnings (FCF, or a modified form like owner's earnings would work also), but here, g is the growth rate for the next 7-10 years.
This still wouldn't work for TWTR, since negative earnings always give you a negative value, so you would have to project out the next few years until twitter has positive earnings (or positive FCF), then you could use the Graham formula and discount it back to present value. But at that point you might as well just do a full DCF.
If you don't want to set up a full DCF, the Benjamin Graham formula gives a quick intrinsic value estimate:
V = E * (8.5 + 2g) * 1.1,
E is earnings (FCF, or a modified form like owner's earnings would work also), but here, g is the growth rate for the next 7-10 years.
This still wouldn't work for TWTR, since negative earnings always give you a negative value, so you would have to project out the next few years until twitter has positive earnings (or positive FCF), then you could use the Graham formula and discount it back to present value. But at that point you might as well just do a full DCF.
You wouldn't happen to know of a book or website where one could learn some of these theories and formulas in a very condensed/quick way?
The Little Boook of Valuation, by Aswath Damodaran, is nice.
You can find lot of things at his website, including a draft version of the book.
http://pages.stern.nyu.edu/~adamodar/
http://pages.stern.nyu.edu/~adamodar/pdfiles/papers/littlebo...
If you literally just want the technical stuff, then anything by Damodaran is good. His Valuations book is awesome, but does not qualify as "condensed / quick". You can also watch his valuation course on YouTube.
I have not read it, but if his "Little Book" is indeed a condensed version of his main book, then its a good start. I think he also gives out a PDF for free on his website.
I would advise against blindly applying DCFs, or at least making real investment decisions from blindly running one. When I first got started I looked for some grand "insert and crank" method of valuation, but now I am convinced there is no shortcut aside of thoroughly understanding a business and its financials.
I have not read it, but if his "Little Book" is indeed a condensed version of his main book, then its a good start. I think he also gives out a PDF for free on his website.
I would advise against blindly applying DCFs, or at least making real investment decisions from blindly running one. When I first got started I looked for some grand "insert and crank" method of valuation, but now I am convinced there is no shortcut aside of thoroughly understanding a business and its financials.
While your post is technically correct in terms of how a DCF works, it is also emblematic of a pervasive misunderstanding within SV about how valuation works and especially how institutional investors (the people who control most of the money in the stock market) approach valuation.
Financial models, especially DCFs, are useful as a framework for comparing similar assets against each other -- whether it's two software companies or two oil refiners.
On the other hand, using DCFs as a tool to derive the "true" value of a company's equity is a mistake. Similarly, imputing truths about the drivers of a given company's DCF valuation -- e.g., g in the Gordon growth model -- based on the value of that company's equity in the financial markets is also a mistake.
The recent explosion (last 5 years or so) in private company valuations is more a function of a global thirst for yield than investor expectations that any given company will be producing free cash flow of a in year x or b in year z.
Financial models, especially DCFs, are useful as a framework for comparing similar assets against each other -- whether it's two software companies or two oil refiners.
On the other hand, using DCFs as a tool to derive the "true" value of a company's equity is a mistake. Similarly, imputing truths about the drivers of a given company's DCF valuation -- e.g., g in the Gordon growth model -- based on the value of that company's equity in the financial markets is also a mistake.
The recent explosion (last 5 years or so) in private company valuations is more a function of a global thirst for yield than investor expectations that any given company will be producing free cash flow of a in year x or b in year z.
You project for as long as you can, but eventually you have use the growth model at the very end. Even before you get to that point you have project a growth model. So year 1 is 1.2A year 2 is 1.2^2A etc. So the growth rate is pretty important in creating valuation.
You're missing my point altogether. I'm aware of how DCFs work and you describe their mechanics accurately.
My point is that the drop in Twitter's stock price has nothing to do with DCFs and more broadly, that DCF models are useful (and used) primarily as a means of comparing similar companies rather than as a "true measure" of a company's value.
My point is that the drop in Twitter's stock price has nothing to do with DCFs and more broadly, that DCF models are useful (and used) primarily as a means of comparing similar companies rather than as a "true measure" of a company's value.
If you are interested in valuing Internet/Tech companies, look into Aswath Damodaran's blog http://aswathdamodaran.blogspot.com/?m=1 In the past he had valued AAPL, FB, Uber etc. His Investment Valuation course at NYU Stern is also available online.
Perhaps because they think lack of growth is a precursor to implosion.
Investors also always think about the immediate obvious future. Twitter may have many monetization opportunities, but without implementing or demonstrating any, you have know way of knowing where they are going or if they'll succeed as an investor.
Investors also always think about the immediate obvious future. Twitter may have many monetization opportunities, but without implementing or demonstrating any, you have know way of knowing where they are going or if they'll succeed as an investor.
Quite possible too. They compete with FB for ad revenue. Social networks tend to be winner take all/most. If Twitter continues to be small, then it has to have a small valuation
There are a lot of reasons why. Just one example is advertisers. The largest advertisers need to work with properties at a certain scale. TV has that. Google has that. Facebook now has that because it grew to be huge. Pinterest doesn't. Twitter doesn't and more importantly now looks like it never will. So if your service's primary revenue stream is advertising but you're unappealing to the largest advertisers it's a big problem.
Seems like a poor example. Twitter is way higher scale than a single TV network. 320M MAU.
Twitter requires custom creatives - this is a huge cost. Every TV network can run standard 30s slot.
Average American spends 4h on TV every single day. Twitter has nothing on that.
Average American spends 4h on TV every single day. Twitter has nothing on that.
Actually the worst part of twitter is that things disappear so quickly (till recently). 320MM MAU doesn't mean everyone sees that. A TV ad can 1) be sent to any station, 2) has a good chance of being seen by a large % of people tuned into that station at that particular time.
Yes. You can't deploy the same ad on FB and Twitter and Pinterest the way you can do a TV spot and deploy it on any channel large or small.
If there are two companies A and B, and you are convinced that A will yield a better ROI than B, you will sell B and buy A – even if there is room for B to yield a positive ROI.
Growth in users/usage/engagement in a social network almost always yields a better ROI than no/low/negative growth in users/usage/engagement.
Twitter does not necessarily have a monetization problem, people just want to invest their money where there is more potential.
Growth in users/usage/engagement in a social network almost always yields a better ROI than no/low/negative growth in users/usage/engagement.
Twitter does not necessarily have a monetization problem, people just want to invest their money where there is more potential.
No. Really depends on the price of B. If you could buy all of twitter for $1 now, you wouldn't?
From an investor perspective, prices in the stock market are basically meaningless.[1] As an investor you can purchases multiples or fractions of a stock which allows you to choose your price. Percent change in price is all that matters for your ROI.
e.x. A $1 increase on a $1 stock purchase yields a 100% increase, a $1 increase on a $100 stock price only yields a 1% increase. In this example, you should have purchased $100 worth of the $1 stock.
e.x. On the other hand, if have some $x less than $100, but you think the $100 stock is going to increase at a faster rate than the $1 stock, you should purchase x/100th of a share of the $100 stock.
[1] A stock's price is meaningful for two reasons. The sum of value of all shares defines the market capitalization for a company. Also, price can be used to exclude buyers in a socioeconomic way. This is rare, most companies will split the stock every so often to keep the price affordable. An example of an exclusionary stock is Berkshire A, which is currently priced around $180,000. Nonetheless, at the end of the day, as an investor, the only thing that matters is your expectation for the percent change in price.
e.x. A $1 increase on a $1 stock purchase yields a 100% increase, a $1 increase on a $100 stock price only yields a 1% increase. In this example, you should have purchased $100 worth of the $1 stock.
e.x. On the other hand, if have some $x less than $100, but you think the $100 stock is going to increase at a faster rate than the $1 stock, you should purchase x/100th of a share of the $100 stock.
[1] A stock's price is meaningful for two reasons. The sum of value of all shares defines the market capitalization for a company. Also, price can be used to exclude buyers in a socioeconomic way. This is rare, most companies will split the stock every so often to keep the price affordable. An example of an exclusionary stock is Berkshire A, which is currently priced around $180,000. Nonetheless, at the end of the day, as an investor, the only thing that matters is your expectation for the percent change in price.
? The whole company = the enterprise value of the company. Maybe you didn't understand what buying all of twitter meant. My point is if you bought twitter for $1 and with their XBN revenue, all you'd have to do to earn a 100% return on capital is make sure you get back a $2 after tax dividend. This illustrates why price matters in investing. But I'd suggest reading Seth Klarman and Buffett for further reading on the relationship between price and value.
Another way to think of it is, forget about speculating and expected price changes. Think about at what price you would be comfortable buying the whole company and taking it private and harvesting cash flows from it. At $1 for an XBN revenue company that's a no brainer. I'd earn a 1000% return in a year just by cutting some costs and making sure capital is allocated in a manner that generates a return.
Another way to think of it is, forget about speculating and expected price changes. Think about at what price you would be comfortable buying the whole company and taking it private and harvesting cash flows from it. At $1 for an XBN revenue company that's a no brainer. I'd earn a 1000% return in a year just by cutting some costs and making sure capital is allocated in a manner that generates a return.
I was referring to just buying some shares as an individual investor, not the whole company. Then yes, obviously total value matters.
Roger that. Cheers.
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Well, yes, because then your ROI would be huge for the money you're putting in.
Neat, me too.
Facebook trained the wall street to think in terms of MAUs.
Companies are compared to peer group companies by the banks. For example, small cap semiconductor companies are compared to each other on the basis of P/E, revenue growth, margins, etc.
What are Twitter's peer companies? Well Facebook is certainly one such company that is publicly traded and its metrics widely available. So Facebook's numbers, and in particular the numbers that Wall Street analysts decide are relevant, become the benchmark stats that Twitter is judged on, even if Twitter actually should not be put into the same basket as Facebook.
What are Twitter's peer companies? Well Facebook is certainly one such company that is publicly traded and its metrics widely available. So Facebook's numbers, and in particular the numbers that Wall Street analysts decide are relevant, become the benchmark stats that Twitter is judged on, even if Twitter actually should not be put into the same basket as Facebook.
Because there are other things that DO grow. So if twitter doesn't grow, then you go invest your money somewhere else that does grow. Which means you sell twitter.
Because monetisation is logarithmic, while growth is supposed to be exponential for a while.
You can go from $1 / user to $1.40 / user or $1.60 / user, but you can't go to $3 / user or $10 / user without some fundamental shifts that'll lose you users.
You CAN go from 100 million users to 300 million to 1 billion.
You can go from $1 / user to $1.40 / user or $1.60 / user, but you can't go to $3 / user or $10 / user without some fundamental shifts that'll lose you users.
You CAN go from 100 million users to 300 million to 1 billion.
An ads business is based on impressions. Growing users is one way of increasing impressions in which you can sell to advertisers.
Wall Street isn't so hung up on user growth. The article is on techcrunch. OK it is an issue but there are lots of others. http://www.bloomberg.com/news/articles/2016-02-10/twitter-us...
Sorry if it's bad form to re-post, but it seems relevant. Here's the counter-argument:
My very controversial view is that Twitter will never achieve profitability (of the level that justifies their market cap). Like Facebook, Twitter is in a two-sided market. Unlike Facebook, it's unclear what the other side of that market is, or how it could be sufficiently monetised:
- Because of the structured data they hold, it's far easier for them to target advertising at finely grained demographics. This is beneficial because it reduces or eliminates the 'user value subtraction' from advertising, and increases the value of placing an ad for advertisers (so Facebook can charge more for it). Twitter have far less scope to do this, as they can only make general inferences about their user based on sentiment and relationship-network analysis. Also, because the data is public, advertisers can analyse and target (via company/brand accounts) for free.
- Facebook enjoy increasing returns to scale. On the user side, if more people use facebook there are more people to stalk or socialise with. On the advertiser side, more users means more eyeballs, more targeting data and more advertising niches. For Twitter, users gain far less from increased scale (as user-base size is not related to 'free expression', and only weakly related to 'public broadcasting', given non-twitter users can read twitter walls). Even worse, because Twitter data is public, they can't charge advertisers for the (less structured) data they generate.
- Although an ill-defined concept, Facebook has increasing returns to scope. That is, as they acquire new types of data on their users, they can offer even better targeting and find more granular marketing niches. For example: imagine if Facebook acquired LinkedIn. It's fairly easy for them to link Facebook and LinkedIn users, as most use their real names on both. So now, in addition to knowing someone is a single 28 year old white guy who enjoys scotch, they now also know he earns a high income. This means that where they used to target him with generic scotch ads, they can now target high-end and expensive scotch ads at him. Twitter's users, on the other hand, mostly interact behind unlinkable pseudonyms.
As heretical as these sound, I think there are only three ways for Twitter to generate significant profits (and they all carry significant drawbacks):
- start charging for API calls above some threshold (i.e. charge for market research) - start charging commercial entities based on number of followers (or volume of tweets) - use adsense (better user data linkability)
tl;dr - Twitter creates significant value. But it's difficult for them to capture at least some of that value as profit (unlike Facebook).
My very controversial view is that Twitter will never achieve profitability (of the level that justifies their market cap). Like Facebook, Twitter is in a two-sided market. Unlike Facebook, it's unclear what the other side of that market is, or how it could be sufficiently monetised:
User --> Facebook <-- Advertiser
(Stalking) --> (Profit) <-- (Eyeballs)
(Socialising) --> (Profit) <-- (Targeting)
User --> Twitter <-- ?
(Free expression) --> (Profit?) <-- ?
(Public broadcast)--> (Profit?) <-- ?
- Because of the structured data they hold, it's far easier for them to target advertising at finely grained demographics. This is beneficial because it reduces or eliminates the 'user value subtraction' from advertising, and increases the value of placing an ad for advertisers (so Facebook can charge more for it). Twitter have far less scope to do this, as they can only make general inferences about their user based on sentiment and relationship-network analysis. Also, because the data is public, advertisers can analyse and target (via company/brand accounts) for free.
- Facebook enjoy increasing returns to scale. On the user side, if more people use facebook there are more people to stalk or socialise with. On the advertiser side, more users means more eyeballs, more targeting data and more advertising niches. For Twitter, users gain far less from increased scale (as user-base size is not related to 'free expression', and only weakly related to 'public broadcasting', given non-twitter users can read twitter walls). Even worse, because Twitter data is public, they can't charge advertisers for the (less structured) data they generate.
- Although an ill-defined concept, Facebook has increasing returns to scope. That is, as they acquire new types of data on their users, they can offer even better targeting and find more granular marketing niches. For example: imagine if Facebook acquired LinkedIn. It's fairly easy for them to link Facebook and LinkedIn users, as most use their real names on both. So now, in addition to knowing someone is a single 28 year old white guy who enjoys scotch, they now also know he earns a high income. This means that where they used to target him with generic scotch ads, they can now target high-end and expensive scotch ads at him. Twitter's users, on the other hand, mostly interact behind unlinkable pseudonyms.
As heretical as these sound, I think there are only three ways for Twitter to generate significant profits (and they all carry significant drawbacks):
- start charging for API calls above some threshold (i.e. charge for market research) - start charging commercial entities based on number of followers (or volume of tweets) - use adsense (better user data linkability)
tl;dr - Twitter creates significant value. But it's difficult for them to capture at least some of that value as profit (unlike Facebook).
Because if you ain't first, you're last! WOOO GIT SOME!!!!!!
These are the investors that want quick cash now. They want to put all their eggs in one basket and cash out before everyone else does.
Or equally plausibly, they are investors worried about the long-term strength of the company since they are in the same market as several other very strong companies who look to the long term.
That's less convenient for the narrative of hatred for Wall Street, of course, but it does seem within the bounds of reason.
That's less convenient for the narrative of hatred for Wall Street, of course, but it does seem within the bounds of reason.
Investing in stable, boring companies (or markets) is a suckers game reserved for pension funds.
Or to put it differently, why invest in a company that isn't growing? How do you make money if you pay $X and don't expect the company to go beyond $X?
Or to put it differently, why invest in a company that isn't growing? How do you make money if you pay $X and don't expect the company to go beyond $X?
This is some of the worst investing advice I've ever heard. High valuation glamour investing in the way you describe has been widely discredited by academics as leading to poor returns. You can in fact slice the market into valuation deciles, and your returns on 5-10 yr rolling averages will increase as you step down to cheaper deciles.
Further, high valuation stocks are subject to much greater crashes while annual best deciles upside is spread across valuation deciles. Meaning High value stocks tend to be a poor bet.
Further, high valuation stocks are subject to much greater crashes while annual best deciles upside is spread across valuation deciles. Meaning High value stocks tend to be a poor bet.
Dividends.
I know there are theoretical alternatives to Twitter, but until the appropriate userbase is out there then they're not truly viable alternatives. I know that's a Catch-22, or a paradox, or whatever you want to call it, but that's the sad reality for those of us that would like to leave the platform. So, in lieu of leaving, here are the features I feel like would help Twitter retain me as a user:
1. Bring back custom apps! Twitter is a service, and I want control over how I access that service. This would also take such a huge burden off of Twitter: don't care about the super bowl? Use an app that lets you filter hashtags, piece of cake! So many features can be implemented on top of a service, with no extra effort from Twitter. I get that this could conceivably enable filtering timeline ads, but seriously they can just pull API keys for apps that do that, it's a non-issue.
2. Let me subscribe to ideas, not just people. If I do care about the super bowl, maybe let me turn on push notifications for tweets about it from people within my network for whom I otherwise do not have push notifications enabled.
3. Make chronological timelines a setting. Not an option, not a tab, a semi-permanently enabled setting. It's the most annoying thing about Facebook right now, having to explicitly re-enable chronological timelines every week or so when Facebook has "forgotten". As it stands, even that much is an improvement over Twitter's proposed always-on non-chronological timeline.
4. Don't nanny me unless I ask you to. There have been reports that Twitter has blocked notifications for @replied tweets because Twitter suspected the tweet would be offensive. I get that harassment is an issue and that Twitter was trying to be proactive, but make it an option. The user in this case was failing to be notified of tweets they wanted to see, and had no way to disable the "feature".
5. Inconsistency foments distrust. If you want that blue check mark to mean something then you'd best lay out a solid and strict process for them. I've seen at least one person have theirs removed over unsubstantiated claims, yet more egregious offenders have kept theirs throughout. I've seen others go through the process for acquire their blue checks and they always seem to have different requirements. Some reported having to change their profile name to their real name, others said they had to put their actual photo on their profile.
1. Bring back custom apps! Twitter is a service, and I want control over how I access that service. This would also take such a huge burden off of Twitter: don't care about the super bowl? Use an app that lets you filter hashtags, piece of cake! So many features can be implemented on top of a service, with no extra effort from Twitter. I get that this could conceivably enable filtering timeline ads, but seriously they can just pull API keys for apps that do that, it's a non-issue.
2. Let me subscribe to ideas, not just people. If I do care about the super bowl, maybe let me turn on push notifications for tweets about it from people within my network for whom I otherwise do not have push notifications enabled.
3. Make chronological timelines a setting. Not an option, not a tab, a semi-permanently enabled setting. It's the most annoying thing about Facebook right now, having to explicitly re-enable chronological timelines every week or so when Facebook has "forgotten". As it stands, even that much is an improvement over Twitter's proposed always-on non-chronological timeline.
4. Don't nanny me unless I ask you to. There have been reports that Twitter has blocked notifications for @replied tweets because Twitter suspected the tweet would be offensive. I get that harassment is an issue and that Twitter was trying to be proactive, but make it an option. The user in this case was failing to be notified of tweets they wanted to see, and had no way to disable the "feature".
5. Inconsistency foments distrust. If you want that blue check mark to mean something then you'd best lay out a solid and strict process for them. I've seen at least one person have theirs removed over unsubstantiated claims, yet more egregious offenders have kept theirs throughout. I've seen others go through the process for acquire their blue checks and they always seem to have different requirements. Some reported having to change their profile name to their real name, others said they had to put their actual photo on their profile.
Out of curiosity, what would your counterargument be to those who say, "Facebook does all the things you list wrong, yet look where they are today. Why should Twitter do any differently?"
I would say "Do you want to be the dominant platform because your users like you, or because they're stuck with you?"
I totally get it that a social media platform can do things that the majority of their users outright hate. Facebook even admitted that they intentionally caused their mobile app to crash randomly, just to test user retention!
But people can always find better options. MySpace was on top once. Digg was on top once. User loyalty is an important part of a social media platform, doubly so when there's someplace to jump ship to.
I totally get it that a social media platform can do things that the majority of their users outright hate. Facebook even admitted that they intentionally caused their mobile app to crash randomly, just to test user retention!
But people can always find better options. MySpace was on top once. Digg was on top once. User loyalty is an important part of a social media platform, doubly so when there's someplace to jump ship to.
If Twitter allowed third-party clients again, they'd all have ad blockers.
Then their API keys would be revoked.
The biggest theoretical alternative is the same for ALL social media/networks; Turn it off, delete your account and go for a walk.
Yeah but the userbase is terrible.
the sentiment i've gathered from people who use twitter professionally, namely journalists and the like, is that an algorithmic timeline would completely destroy the value proposition for them. twitter is such a nice little social media app that i find it disturbing to see it bullied by wall street. such is the fate of a publicly traded company. if it were a private company that could focus on being profitable without growing extravagantly and taking over the world like Facebook or Google, it could focus on providing its unique value to its most important users.
i think of all the social media platforms i use, twitter is the one that most tremendously contributes to society. twitter, far more than facebook in my opinion, democratizes the dissemination of ideas and information.
i think of all the social media platforms i use, twitter is the one that most tremendously contributes to society. twitter, far more than facebook in my opinion, democratizes the dissemination of ideas and information.
I think it's important to remember that twitter took more than $750 Million in funding prior to going public. Even if it was still a private company, those investors would expect a return on their investment, forcing twitter into a similar "growth or profitability" focus. It's really only possible for a company to focus on sustainable growth and small profits if it isn't beholden to anyone's expectations.
i was thinking that if the stock price goes low enough, someone with a longer view could buy it and take it private.
Why hasn't FB bought Twitter + Yahoo yet.
> twitter, far more than facebook in my opinion, democratizes the dissemination of ideas and information.
Not any more since the last wave of closing "alleged ISIS" accounts. I can't stand those religious retards either, but banning people just because they follow a religious cult of killers who spread hate and murder threats?
You could use the same argument to ban practically everything... including followers of Donald "Muslims out!!!" Trump, Frauke "Shoot refugees at the border" Petry, Recep Tayyip "Kurd Killer" Erdogan or whoever is the King of Saudi Arabia.
None of these groups are in any danger to be banned from popular social media sites despite their ideology being very similar (or, in case of Saudi Arabia, identically) to the IS and their followers equally murderish and morally depraved (Erdogan, Saudi Arabia, the neo-Nazis burning refugee camps down in Germany).
It's inconsequent and the mere possibility of banning someone over anything that members of another (whiter? religious-er?) group are allowed to do opens up highly complex moral issues.
Not any more since the last wave of closing "alleged ISIS" accounts. I can't stand those religious retards either, but banning people just because they follow a religious cult of killers who spread hate and murder threats?
You could use the same argument to ban practically everything... including followers of Donald "Muslims out!!!" Trump, Frauke "Shoot refugees at the border" Petry, Recep Tayyip "Kurd Killer" Erdogan or whoever is the King of Saudi Arabia.
None of these groups are in any danger to be banned from popular social media sites despite their ideology being very similar (or, in case of Saudi Arabia, identically) to the IS and their followers equally murderish and morally depraved (Erdogan, Saudi Arabia, the neo-Nazis burning refugee camps down in Germany).
It's inconsequent and the mere possibility of banning someone over anything that members of another (whiter? religious-er?) group are allowed to do opens up highly complex moral issues.
banning people just because they follow a religious cult of killers who spread hate and murder threats
I dunno man—when you put it like that, it sounds like a pretty great idea.
I dunno man—when you put it like that, it sounds like a pretty great idea.
Well then, why is @RT_Erdogan, @SaudiEmbassyUSA or @FraukePetry still a thing?
Because they're white, because they're allied with the West or what?
Political bigotry at its finest. Either you tell ALL the radicals to fuck off or none at all.
Because they're white, because they're allied with the West or what?
Political bigotry at its finest. Either you tell ALL the radicals to fuck off or none at all.
No, it is perfectly acceptable to ban the most extreme members. Just because they don't ban everyone with extreme views doesn't mean they need to keep all of them.
I am tired of these all-or-nothing discussions that seem commonplace nowadays. The world is not as brightly defined as you think it is. We can make forward progress progressively.
I am tired of these all-or-nothing discussions that seem commonplace nowadays. The world is not as brightly defined as you think it is. We can make forward progress progressively.
[deleted]
It only opens up highly complex moral issues in the same sense that a principle of absolute freedom of speech closes these issues by refusing to engage with them at all. I'm not a principled person and my politics don't come from supporting one set of principles over another. I'm only troubled by twitter's conduct insofar as the network is controlled by a few private individuals who aren't accountable to their users. To me, it's the concentrated, unilateral power that is the issue. Because power gets abused. That's essentially what happens to concentrated power.
A federated, open twitter platform would be better. Ideal, in fact. If twitter the company were merely an operator in such a network, i would not take much issue with them banning people i personally would evict from my social spheres.
i mean, i agree with you in that the other examples you mentioned are all objectionable to me too and i think a moral justification for banning ISIS accounts can be extended to those cases. it doesn't matter what they say the reasoning is, the underlying mechanism is a power struggle between extremely large and grotesque power structures.
A federated, open twitter platform would be better. Ideal, in fact. If twitter the company were merely an operator in such a network, i would not take much issue with them banning people i personally would evict from my social spheres.
i mean, i agree with you in that the other examples you mentioned are all objectionable to me too and i think a moral justification for banning ISIS accounts can be extended to those cases. it doesn't matter what they say the reasoning is, the underlying mechanism is a power struggle between extremely large and grotesque power structures.
> A federated, open twitter platform would be better. Ideal, in fact.
Federated platforms don't work. We've seen them fail with OpenID, Persona, Usenet and email; I'm stretching the definition of failed a bit with the latter two but Usenet is a spam- and warez-filled shadow of what it once was and email, well, if you're not one of the bigger email service providers good luck ensuring reliable delivery of your messages due to spam, and that IS failure in my eyes.
At a certain scale all services, centralized or federated, require massive amounts of money simply to maintain the infrastructure and to prevent "account rot".
Without ads there is no monetizing in free federated services, that is why Persona and OpenID failed.
Federated platforms don't work. We've seen them fail with OpenID, Persona, Usenet and email; I'm stretching the definition of failed a bit with the latter two but Usenet is a spam- and warez-filled shadow of what it once was and email, well, if you're not one of the bigger email service providers good luck ensuring reliable delivery of your messages due to spam, and that IS failure in my eyes.
At a certain scale all services, centralized or federated, require massive amounts of money simply to maintain the infrastructure and to prevent "account rot".
Without ads there is no monetizing in free federated services, that is why Persona and OpenID failed.
They've already slid half way down the slippery slope.
They're not actually banning those ISIS accounts, they're just banning people who "harass" (read: interact with) high profile accounts. This is hitting the national consciousness with the "BernieBro" narrative, where high profile journalists are finally being told their shit stinks and are trying to cast such disagreements as ban-worthy harassment.
A good example was a particular account (@swarthyvillian) was receiving literal death threats from a Syria Liberation Army account for, I kid you not, disagreements on MMA rankings. Several weeks later the same guy was banned after linking to tweets by Arthur Chu and Sady Doyle for "pile on harassment" because his followers said mean (and admittedly colorful) things in response.
The SLA account is still active.
They're not actually banning those ISIS accounts, they're just banning people who "harass" (read: interact with) high profile accounts. This is hitting the national consciousness with the "BernieBro" narrative, where high profile journalists are finally being told their shit stinks and are trying to cast such disagreements as ban-worthy harassment.
A good example was a particular account (@swarthyvillian) was receiving literal death threats from a Syria Liberation Army account for, I kid you not, disagreements on MMA rankings. Several weeks later the same guy was banned after linking to tweets by Arthur Chu and Sady Doyle for "pile on harassment" because his followers said mean (and admittedly colorful) things in response.
The SLA account is still active.
I don't think Donald Trump ever advocated murder, unlike the rest of them. Advocating keeping a bunch of murderers out is not the same as advocating murder. You can argue about him tarring too many people with the same brush, but when entire nations (like Saudi Arabia) follow this murderous religion, and act this way, I don't see how it's really invalid to not group them together. It's not like murderous Muslims are some tiny little extremist cult; they're the norm in that whole region. And it's not just Saudi Arabia's government: when Egypt overthrew Mubarak and had elections, they elected an Islamist group.
US YoY numbers are down--this is true. Q4 has historically been a bad growth month for them.
If you're focused on MAUs, then Q4 in a non-election year is going to be bad. It's like "peak boring Twitter". Everyone is rocking Amazon and the online retailers. There are no new TV series or movies dropping. Bowl season hasn't started. World Cup 2014 (Men) and 2015 (Women) are past.
Granted, the US annual YoY numbers aren't good, but:
* International is up 11%.
* 2016 is an election year.
* And there are Olympics this year.
* And Q1 is historically the strongest growth month.
I kind of think that if you're strictly MAU-focused, it's not a bad time to get in.
That said:
* I have noticed casual users dropping off their interaction volume based on my puny timeline.
* I attribute some of that not to anything competitive, but to the economy picking up and everyone being so freaking busy. More lurking, less of a need to self-validate. Call it social proof fatigue. (I really suspect this is the canary in the coal mine for Facebook engagement.)
* The sharp divide between folks who claim to "get" Twitter and those who claim to "don't get" Twitter is sharpening. Rather than seeing this as a negative, I see this as a bifurcation that can be studied and exploited.
Twitter still has a unique and important niche. There are so many ways they can innovate around this niche without destroying it.
My take:
* Twitter search is an unexploited global resource.
* Buffing up search and offering it orthogonally to the Twitter user experience is a HUGE potential upside that is untapped. They can monetize the hell out of that and not screw up the experience! Why limit engagement with their data flow to the timeline! I'd gladly accept more ads in a search than in my timeline.
* Restating that: content creators--the people who tweet--low barrier to entry. Market search and Moments in a broader way. The pulse of the country. You can laden that with the ads. Those are the MAUs you want.
They'll be fine. This feels more like a narrative created by competitors or potential acquirers to get them on the cheap before they can execute on their core value. Maybe they're run by weak-willed dullards who will cave because they can't see it, and it will be Google or someone else with a lick of sense that leads them to their promise, or who acquires them to kill them off.
If you're focused on MAUs, then Q4 in a non-election year is going to be bad. It's like "peak boring Twitter". Everyone is rocking Amazon and the online retailers. There are no new TV series or movies dropping. Bowl season hasn't started. World Cup 2014 (Men) and 2015 (Women) are past.
Granted, the US annual YoY numbers aren't good, but:
* International is up 11%.
* 2016 is an election year.
* And there are Olympics this year.
* And Q1 is historically the strongest growth month.
I kind of think that if you're strictly MAU-focused, it's not a bad time to get in.
That said:
* I have noticed casual users dropping off their interaction volume based on my puny timeline.
* I attribute some of that not to anything competitive, but to the economy picking up and everyone being so freaking busy. More lurking, less of a need to self-validate. Call it social proof fatigue. (I really suspect this is the canary in the coal mine for Facebook engagement.)
* The sharp divide between folks who claim to "get" Twitter and those who claim to "don't get" Twitter is sharpening. Rather than seeing this as a negative, I see this as a bifurcation that can be studied and exploited.
Twitter still has a unique and important niche. There are so many ways they can innovate around this niche without destroying it.
My take:
* Twitter search is an unexploited global resource.
* Buffing up search and offering it orthogonally to the Twitter user experience is a HUGE potential upside that is untapped. They can monetize the hell out of that and not screw up the experience! Why limit engagement with their data flow to the timeline! I'd gladly accept more ads in a search than in my timeline.
* Restating that: content creators--the people who tweet--low barrier to entry. Market search and Moments in a broader way. The pulse of the country. You can laden that with the ads. Those are the MAUs you want.
They'll be fine. This feels more like a narrative created by competitors or potential acquirers to get them on the cheap before they can execute on their core value. Maybe they're run by weak-willed dullards who will cave because they can't see it, and it will be Google or someone else with a lick of sense that leads them to their promise, or who acquires them to kill them off.
There is such a unique opportunity Twitter has attempted but not fully captured with Moments. When big events happen, people take to Twitter. With an aggregate of Periscope, Vine, and Twitter, we could have interactive LIVE events. Tune in on your phone, and don't just join the conversation, be part of the event. Unfortunately, Moments feels too static. They hand pick some decent tweets and there you go... Give me the car chase feeling of the 1990s! Where is a white bronco when you need one...
Twitter seems to advertise to possibly "offensive" UGC to make its platform shine. It's not an invalid consideration, but I feel they're overdoing it.
When I search a hashtag, I want to see what people are talking about. I don't want to see what CNN or HuffPost is tweeting about. Because I'd to to Google for that.
Twitter needs an automatic curation / reputation system, auto language filtering, and then a greater focus on the tweet firehose like you said. Why their product team doesn't grasp this is beyond me.
When I search a hashtag, I want to see what people are talking about. I don't want to see what CNN or HuffPost is tweeting about. Because I'd to to Google for that.
Twitter needs an automatic curation / reputation system, auto language filtering, and then a greater focus on the tweet firehose like you said. Why their product team doesn't grasp this is beyond me.
Q4 was the first quarter ever with negative growth: http://twitter.com/JasonAbbruzzese/status/697532872824070144...
I think a deeper integration with periscope and timelines will help Twitter. The real time direct global conversation is important.
I didn't understand Periscope until I saw a mini-celeb use it. People love it. It's like Snapchat in live group form for celebs. Like why people love to call into a live radio or TV show. Regardless of what happens to traditional Twitter, I think Periscope has a lot of room to grow.
However, Twitter's algo timeline makes it nearly useless to me. It was already a mess and the linear timeline was the only thing I liked. The linear timeline would have been manageable if they still allowed third party clients... but I digress. I'm sure I'll still use it anyway to announce software releases and get customer support from slacking companies.
However, Twitter's algo timeline makes it nearly useless to me. It was already a mess and the linear timeline was the only thing I liked. The linear timeline would have been manageable if they still allowed third party clients... but I digress. I'm sure I'll still use it anyway to announce software releases and get customer support from slacking companies.
The problem is that Periscope is a startup. Wall St will not like Twitter to be run as a startup, and yet Dorsey is trying to position Periscope as the savior for Twitter. I think that Periscope is an awesome product btw, but sinking Twitter may take it down with it unfortunately.
Periscope seems like it works great for [mini]-celebs, but unlike other platforms that have gotten huge from celebrity use (Twitter itself, Snapchat, etc), I don't see the normal-person use case.
If Twitter ceased to exist, would it really matter?
That is the fundamental problem with it. The world gets by perfectly fine without Twitter (and all those that 'tweet'). It is not a communication medium of record in the way that email is. I do not ask people 'did you get my tweet?' in the way I might ask people if they got my email. I never say 'I will tweet it to you' in the way I might text/skype/email someone.
I know some of my colleagues and family members say great things about Twitter, but these guys commute and Twitter is just another thing they read on the journey. I actually have no clue what my sister's Twitter handle is, I have no idea what any of my current colleagues Twitter handles are either. It simply has never occurred to me that I should ask any of them how to follow them on Twitter. I don't care and neither do they.
Twitter also fails the 'other people's screens test'. What is this? Well, walk through a large enough office at lunch time and see what NORMAL people have on their screens whilst working and whilst on lunch. Nobody is reading Twitter because they have to as part of what their job or out of choice in the few moments they have of 'free time'. The recently slagged off LinkedIn and the oft-criticised Facebook do pretty well on the 'other people's screens test' even if it is only the HR department that do LinkedIn. Twitter isn't even worth blocking from corporate IT networks!!!
I feel that with Twitter some people have bought into the hype and personally invested time and effort into believing that hype, for them to say it is useless is not going to happen. Yes it does allow me to have a window in on the programming community I am part of, however, one 'vital' news story feed in my micro-world-of-programming stopped and life went on for me, despite not having Twitter to brief me of what I thought were important developments. RSS fulfilled this requirement beforehand, life went on when RSS stopped and life will go on when this stupid Twitter thing stops, which I hope will happen sooner rather than later. Really it is like CB radio of the 1970's.
That is the fundamental problem with it. The world gets by perfectly fine without Twitter (and all those that 'tweet'). It is not a communication medium of record in the way that email is. I do not ask people 'did you get my tweet?' in the way I might ask people if they got my email. I never say 'I will tweet it to you' in the way I might text/skype/email someone.
I know some of my colleagues and family members say great things about Twitter, but these guys commute and Twitter is just another thing they read on the journey. I actually have no clue what my sister's Twitter handle is, I have no idea what any of my current colleagues Twitter handles are either. It simply has never occurred to me that I should ask any of them how to follow them on Twitter. I don't care and neither do they.
Twitter also fails the 'other people's screens test'. What is this? Well, walk through a large enough office at lunch time and see what NORMAL people have on their screens whilst working and whilst on lunch. Nobody is reading Twitter because they have to as part of what their job or out of choice in the few moments they have of 'free time'. The recently slagged off LinkedIn and the oft-criticised Facebook do pretty well on the 'other people's screens test' even if it is only the HR department that do LinkedIn. Twitter isn't even worth blocking from corporate IT networks!!!
I feel that with Twitter some people have bought into the hype and personally invested time and effort into believing that hype, for them to say it is useless is not going to happen. Yes it does allow me to have a window in on the programming community I am part of, however, one 'vital' news story feed in my micro-world-of-programming stopped and life went on for me, despite not having Twitter to brief me of what I thought were important developments. RSS fulfilled this requirement beforehand, life went on when RSS stopped and life will go on when this stupid Twitter thing stops, which I hope will happen sooner rather than later. Really it is like CB radio of the 1970's.
Does Twitter break out the numbers on Vine? The valuation is starting to get tempting at these levels. I think Wall St is missing the big picture, as usual.
I think Twitter can really pivot to become the first aggregated MicroPayments platform.
An all-you-can eat option: $10/Month - Read any news, blog, whatnot, follow anyone, tweet to anyone, upload anykind of media
A-la-cart: pay 0.01$ after reading the 140 character summary for full article access, pay 0.05$ for full tweet stream access to some really useful accounts, etc
Free: Every fourth tweet is an ad, You get only previews of articles, and only a portion of the Tweetstream of really useful content.
Twitter can then kick-back some dough to the content publishers.
Twitter maintains and controls the payment info already anyway. If they get ambitious they can hook into buying and selling as well.
An all-you-can eat option: $10/Month - Read any news, blog, whatnot, follow anyone, tweet to anyone, upload anykind of media
A-la-cart: pay 0.01$ after reading the 140 character summary for full article access, pay 0.05$ for full tweet stream access to some really useful accounts, etc
Free: Every fourth tweet is an ad, You get only previews of articles, and only a portion of the Tweetstream of really useful content.
Twitter can then kick-back some dough to the content publishers.
Twitter maintains and controls the payment info already anyway. If they get ambitious they can hook into buying and selling as well.
There is a huge jump in $0 and $5, which is the minimum funding amount for cc fees to not be huge. You'd see a mass user exodus.
TWitter seems to be having this issue for a while now. I wonder if it'll do what FB is doing by going in to other ventures
I never used Twitter because the product's name implicitly refers to its users as twits (a characterization which is usually accurate.)
Can we stay away from quarterly earning reports and wall street style newspaper reportings? This industry is supposed to be a little different. Let's not go along with their rhythm as that way they still mold us in their image.
Let's not be like them.
Let's not be like them.
Sure. You just need to stop going public after diluting ownership down so far you have no control over your own company via endless rounds of VC to pay for not having a business model (causing you to bleed red ink and ultimately be overly dependent on outside money), and stop giving all the power to institutional investors accordingly.
Then you can get away from the pressure of quarterly results. Otherwise, no, there's no scenario under which you can get away from that influence while owning 3%-5% of your own company and being public.
Twitter made a mistake by not having its ownership structure set up like Facebook and Google.
Then you can get away from the pressure of quarterly results. Otherwise, no, there's no scenario under which you can get away from that influence while owning 3%-5% of your own company and being public.
Twitter made a mistake by not having its ownership structure set up like Facebook and Google.
Here's an archive.org link to Dan Bigman's May 2012 Forbes post on those ownership structures (published a few months after Facebook's IPO):
http://web.archive.org/web/20120527223753/http://www.forbes....
You are assuming they had a real choice. FB and Google's structure is uncommon because most owners/founders don't have the clout to be able to get investors to read that deal and still want to sign up. And 5% of a large public corporation is a huge share.
What is the alternative? I am genuinely curious what could be a better barometer of business; Should I take @jack's word or ask, politely, to see the numbers?
I'm looking forward to this algorithmic feed, as much as I like the simplicity of the firehose of tweets. The reason I avoid twitter right now is because I end up following a few people that I only care a little bit about, yet they dominate my feed disproportionately. It'll be a lot harder for Twitter to figure out relevance for their users though, compared to Facebook, considering the lack of user actions they have in comparison. (It's a much more passive platform)
"Goes nowhere"? I see 2 million new users.
As I blogged about this recently (http://brianstorms.com/2016/02/twitter-executives-are-like-l...), Twitter execs fiddling with the product and the wall street banksters complaining about Twitter's growth remind me of whiny air travelers as described by Louis CK. As he might say about Twitter, people! Twitter is a technological marvel! Over three hundred MILLION people connected all over the world in real time! There's never been anything like it. And it is growing each month! What a wonderful world!
As I blogged about this recently (http://brianstorms.com/2016/02/twitter-executives-are-like-l...), Twitter execs fiddling with the product and the wall street banksters complaining about Twitter's growth remind me of whiny air travelers as described by Louis CK. As he might say about Twitter, people! Twitter is a technological marvel! Over three hundred MILLION people connected all over the world in real time! There's never been anything like it. And it is growing each month! What a wonderful world!