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There is no cognitive dissonance. Twitter makes plenty of revenue - $2.2B in 2015. But Twitter's costs are nonsensically high. They spent $1.2B on labor and SG

There is no cognitive dissonance. Twitter makes plenty of revenue - $2.2B in 2015. But Twitter's costs are nonsensically high. They spent $1.2B on labor and SGA (marketing, sales, rent). They spent $800m on R&D (your guess is as good as mine where this money went, most likely extremely overvalued acqui-hires). They spent $700 on cost of revenue (running servers, hosting fees, electricity presumably - the actual direct costs of providing the service). For a net loss of $500m. Twitter needs to lay people off and stop spending so much on "R&D". I imagine the company could easily be viable if it downsized. As citizens we should feel about as bad as Twitter's possible failure as we would about a mismanaged mattress store failing.

pkaye 10y ago
I wonder what is the fewest number of employees needed to run Twitter with some way to financially support itself. Could it reduce to the number of employees as at Reddit and still substain itself?
- kesselvon 10y ago
  How they're spending 30% of revenue on R&D and have little to show for it is beyond me. They can probably cut staff by a huge percentage and there would be little impact on day-to-day operations.
- beagle3 10y ago
  Whatsapp was having comparable traffic and users with something like 20 engineers. It is not directly comparable, as all whatsapp users at the time were app users whereas twitter's users are web users (more expensive to run). Furthermore, with everything public, Twitter needs a lot more policing than whatsapp ever did. But they can probably reduce their stuff to 2-5 percent of current size and still provide the same service that users get - though it will have to be better engineered than what they are currently running.
  - cotinoco 10y ago
    Twitter isn't comparable to whatsapp like... absolutely at all. It's different in all ways I can think about.
- TheRealDunkirk 10y ago
  This is an apples and oranges comparison. The changes Reddit instituted under Pao, and the return of spez, were designed to create a platform that can be "remotely controlled." The entire site is being gamed from behind the scenes now. Oh, wait. No, this IS apples to apples. You're right. Why in the world do they need so many people? I'd say Twitter is directly employing their gamers, and Reddit leaves it to political PAC's.
pavlov 10y ago
I don't think acquihires would count as R&D, acquisitions are booked differently. My guess is that a large part of Twitter's R&D costs involve initiatives that don't relate to the main site's user experience at all: ads, live streams and mobile apps. Improvements on the sales/admin side for advertisers and content producers can be vital for revenue, but you don't see that if you're a Twitter user rather than a paying customer. Same with apps: Twitter has Vine, Periscope, and who knows what else in development... But these don't improve the tweeting/timeline UX.

pkaye 10y ago

I wonder what is the fewest number of employees needed to run Twitter with some way to financially support itself. Could it reduce to the number of employees as at Reddit and still substain itself?

kesselvon 10y ago
How they're spending 30% of revenue on R&D and have little to show for it is beyond me. They can probably cut staff by a huge percentage and there would be little impact on day-to-day operations.
beagle3 10y ago
Whatsapp was having comparable traffic and users with something like 20 engineers. It is not directly comparable, as all whatsapp users at the time were app users whereas twitter's users are web users (more expensive to run). Furthermore, with everything public, Twitter needs a lot more policing than whatsapp ever did. But they can probably reduce their stuff to 2-5 percent of current size and still provide the same service that users get - though it will have to be better engineered than what they are currently running.
- cotinoco 10y ago
  Twitter isn't comparable to whatsapp like... absolutely at all. It's different in all ways I can think about.
TheRealDunkirk 10y ago
This is an apples and oranges comparison. The changes Reddit instituted under Pao, and the return of spez, were designed to create a platform that can be "remotely controlled." The entire site is being gamed from behind the scenes now. Oh, wait. No, this IS apples to apples. You're right. Why in the world do they need so many people? I'd say Twitter is directly employing their gamers, and Reddit leaves it to political PAC's.

pavlov 10y ago

I don't think acquihires would count as R&D, acquisitions are booked differently. My guess is that a large part of Twitter's R&D costs involve initiatives that don't relate to the main site's user experience at all: ads, live streams and mobile apps. Improvements on the sales/admin side for advertisers and content producers can be vital for revenue, but you don't see that if you're a Twitter user rather than a paying customer. Same with apps: Twitter has Vine, Periscope, and who knows what else in development... But these don't improve the tweeting/timeline UX.