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Twitter's problem is not really revenue; the ads and other sources are working (they'll probably announce over $2 billion in 2015 revenue). Their problem is tha

by firasd 11y ago

Twitter's problem is not really revenue; the ads and other sources are working (they'll probably announce over $2 billion in 2015 revenue). Their problem is that Facebook has trained Wall Street to look at Monthly Active Users as a core metric and Twitter's user growth and retention doesn't match up well compared to FB. Twitter execs have been trying to underscore their "logged-out users", as in views on embedded tweets and other pageviews, and are adding ads in those places.

brandnewlow 11y ago
If they retrain Wall Street to value logged out users, then they will have to accept a much lower valuation as the new norm. Twitter's IPO valuation was based on persuading the market that they were another Facebook, i.e. a sticky platform that would extend out to solve problems in varied industries. I agree that their media business is really solid. They acquired TellApart, Mopub, and a bunch of smart ad tech people. The problem is that a solid media business is not what investors were hoping for. If that's Twitter's new story then they're a well-equipped media/ad tech company -- another AOL, Yahoo, or even Criteo. Those are real companies that generate revenue but they're not the sorts of companies able to recruit top-level talent, retain and empower their acquired talent or garner 10x valuations.
- username223 11y ago
  > Those are real companies that generate revenue but they're not the sorts of companies able to recruit top-level talent, retain and empower their acquired talent or garner 10x valuations. That kind of sums up the current bubble, doesn't it?
prostoalex 11y ago
The problem with logged-out users is that the only advertisers vying for those page views are of "punch the monkey" type. There's no premium ad inventory chasing logged-out randos.
- ffumarola 11y ago
  There are ways to allow advertisers to use identity to target logged out users, so it doesn't have to be priced as remnant inventory.
developer2 11y ago
Why do Facebook's metrics matter when talking about Twitter? Just because Facebook and Twitter are both social networking sites does not mean they are comparable. Twitter should not have gone public, or at least not at the valuation it did. I think those who invested just wanted to ride Facebook's coattails, assuming that a new "social networking" bubble could be created and investing in any such company would be an easy buck. Surprise! You actually need to evaluate a company's individual merits, rather than expecting that any Silicon Valley IPO is a guaranteed windfall success. And how in the world does Twitter have 4300 employees? The product should be sustainable with less than 10% of that.
- _Codemonkeyism 11y ago
  "And how in the world does Twitter have 4300 employees? The product should be sustainable with less than 10% of that." Assumption for this comment: many of them are working in engineering. I have thought about this for some years. I have no explaination yet, some hypothesis though. Many CEOs and VCs think engineering is key. CEOs don't know how many engineers they need. So often they have as many as they can afford and are rarely challenged for that. I've seen many companies where I look at a Kanban/Scrum board for the features and think "Hu? This is what they working on?", a lot of features have no impact. Number of features seems to be a function of number of engineers not number of good ideas (with impact). So there is no downward pressure on the number of engineers, work fills the over capacity. This leads to 4300 employees. But far from sure, still wondering about that mystery of high employee numbers of many companies.

by firasd 11y ago

brandnewlow 11y ago

If they retrain Wall Street to value logged out users, then they will have to accept a much lower valuation as the new norm. Twitter's IPO valuation was based on persuading the market that they were another Facebook, i.e. a sticky platform that would extend out to solve problems in varied industries. I agree that their media business is really solid. They acquired TellApart, Mopub, and a bunch of smart ad tech people. The problem is that a solid media business is not what investors were hoping for. If that's Twitter's new story then they're a well-equipped media/ad tech company -- another AOL, Yahoo, or even Criteo. Those are real companies that generate revenue but they're not the sorts of companies able to recruit top-level talent, retain and empower their acquired talent or garner 10x valuations.

username223 11y ago
> Those are real companies that generate revenue but they're not the sorts of companies able to recruit top-level talent, retain and empower their acquired talent or garner 10x valuations. That kind of sums up the current bubble, doesn't it?

prostoalex 11y ago

The problem with logged-out users is that the only advertisers vying for those page views are of "punch the monkey" type. There's no premium ad inventory chasing logged-out randos.

ffumarola 11y ago
There are ways to allow advertisers to use identity to target logged out users, so it doesn't have to be priced as remnant inventory.

developer2 11y ago

Why do Facebook's metrics matter when talking about Twitter? Just because Facebook and Twitter are both social networking sites does not mean they are comparable. Twitter should not have gone public, or at least not at the valuation it did. I think those who invested just wanted to ride Facebook's coattails, assuming that a new "social networking" bubble could be created and investing in any such company would be an easy buck. Surprise! You actually need to evaluate a company's individual merits, rather than expecting that any Silicon Valley IPO is a guaranteed windfall success. And how in the world does Twitter have 4300 employees? The product should be sustainable with less than 10% of that.

_Codemonkeyism 11y ago
"And how in the world does Twitter have 4300 employees? The product should be sustainable with less than 10% of that." Assumption for this comment: many of them are working in engineering. I have thought about this for some years. I have no explaination yet, some hypothesis though. Many CEOs and VCs think engineering is key. CEOs don't know how many engineers they need. So often they have as many as they can afford and are rarely challenged for that. I've seen many companies where I look at a Kanban/Scrum board for the features and think "Hu? This is what they working on?", a lot of features have no impact. Number of features seems to be a function of number of engineers not number of good ideas (with impact). So there is no downward pressure on the number of engineers, work fills the over capacity. This leads to 4300 employees. But far from sure, still wondering about that mystery of high employee numbers of many companies.