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When you say "Joe Public" you make it sound like the stock is being bought with our tax dollars. Anybody who buys TWTR is making an informed decision and expec

When you say "Joe Public" you make it sound like the stock is being bought with our tax dollars. Anybody who buys TWTR is making an informed decision and expects Twitter to do very well. It's hard to imagine Twitter today eventually being worth the current market cap of $25B. However, take a look at Google as a prime example of success. When GOOG first hit the market in 2004 it got a market cap of $23B. It was somewhat hard to imagine a web search company ever being worth that much. Today it's at $340B.

bct 13y ago
> Anybody who buys TWTR is making an informed decision If only.
nine_k 13y ago
Google had a solid, well-working monetization mechanism: AdWords, released in 2000, 4 years before the IPO. It was easy to see how it performs financially and why it might skyrocket. Can someone enlighten me how Twitter might earn some steady money?
- olefoo 13y ago
  Yes. Think about all of the paywalled news outlets out there. Think about how many journalists tweet their stories to drive their personal brand. Think about immensely popular twitter accounts and sought after domain experts. Think about the fact that someone who is very entertaining on twitter needs to leave twitter to ( consult, sell t-shirts, produce media, etc. ) if they want to make money. Think about how t.co makes it possible for them to track url usage attributable to them. Remember when micropayments for media was a buzzword? If you still don't get why twitter might be undervalued. I would be happy to to explain it to you with, charts, graphs and a full research report; for a fee.
  - silverbax88 13y ago
    I don't want to sound dismissive, but this is very similar to the 'eyeballs' strategies that were bandied about prior to 2000. If a million people use a link to go to a paywall site, that's awesome - except as of now the data shows that Twitter users don't become buyers as a general rule. Can they make money? Sure. Can they make money with ads? Sure. Can they make money with massive vertical media funnels? Well...what will make them more successful than Apple, Google, Microsoft and TimeWarner who have all been trying to do the same exact thing for many years? Not saying they won't...just saying I'd like to see some track record before I buy into an idea that no one has been able to make work yet.
    - hayksaakian 13y ago
      From using their ad service I can say: their demographic targeting is razor sharp, you can target followers of specific users, or people within any of the standard demographics. You can also target people by specific interests. I think this is the AdWords for branding
    - nl 13y ago
      Can they make money? Sure. Can they make money with ads? Sure. Can they make money with massive vertical media funnels? Well...what will make them more successful than Apple, Google, Microsoft and TimeWarner who have all been trying to do the same exact thing for many years? Err.. I'm not sure about Apple or TimeWarner, but Google and Microsoft have been very successful at making display advertising work well. Check out the IAB 2013 Half Yearly report[1]. Some key quotes: Display-related advertising accounted for $3.1 billion or 30% of total revenues during Q2 2013, up 8% from the $2.9 billion (33% of total) reported in Q2 2012. Q2 2013 Display-related advertising includes Display/Banner Ads (19% of revenues, or $1.9 billion), Rich Media (3% or $329 million), Digital Video (7% or $676 million), and Sponsorship (2% or $181 million). Note that they aren't counting mobile advertising as display advertising (even though much of it effectively is). Mobile revenues continued to quickly gain share, representing 15% of total revenues in HY 2013, as compared with 9% reported in FY 2012 and 5% in FY 2011. First half 2013 Mobile revenues represent 90% of total 2012 Mobile revenues. Note that Twitter has particularly strong mobile usage. Many people don't realize that people still pay a lot for "eyeballs": At 65% of advertising revenues through half-year 2013, performance-based pricing appears to have leveled off, even experiencing a slight decline from its high of 66% for the full year 2012. As a result, CPM/impression-based pricing gained slightly, up to 33% for the half-year, its highest point since 2010. [1] http://www.iab.net/media/file/IABInternetAdvertisingRevenueReportHY2013FINALdoc.pdf http://www.iab.net/media/file/IABInternetAdvertisingRevenueR...
      - silverbax88 13y ago
        Who said anything about not making display advertising work? I'm talking about the whole vertical integration to television that so many analysts are basing their 75X revenues pricing on.
- Spooky23 13y ago
  Partnerships with TV networks seem to be the big thing now. I guess lots of people cozy up to their iPad and post reactions to TV shows in real time on Twitter with hashtags -- driving live viewing of TV, watching of ads and giving marketers another way of delivering coordinated mesages to people.
  - benburleson 13y ago
    I see you listen to NPR also.
- pbreit 13y ago
  A lot of investors actually prefer a less known upside.
- pbreit 13y ago
  Advertising will be a major component. But I think there are some other powerful revenue-making opportunities around data and services. Many investors appreciate a blurrier future since it can lead to more upside.
  - oneeyedpigeon 13y ago
    I would love to see twitter take the other route: no advertising, charge for the service. Keep the quality of the experience high (which advertising will certainly not do), and it will be more than worth a dollar or two per year to millions of people. Offer a premium service to high-value individuals and businesses (quite what that offer is, of course, I'm not entirely sure). Advertising online is, I believe, in the long run, going to be tricky to maintain as a source of income, even for content-centric sites. For service-oriented sites, such as twitter, I just don't think it's the right approach, especially given a nice API which allows the ads to be bypassed. OK, I'm sure plenty of people will disagree, but it would be really nice for a high profile social network to just try this and see if they can make it work (I know linkedin's model is essentially this, but I see them as a very different beast from the general interest communication juggernaut that is twitter).
- clarky07 13y ago
  Well, they already have hundreds of millions in revenue that has been growing 100% a year. It's not like they've never made a dime. The other responses here give a few ideas for new revenue streams as well.
nine_k 13y ago
Regarding tax dollars: please take a moment and google for "QE3 stimulus package". If not tax dollars, it's inflation dollars, which is an indirect tax anyway.
- nerfhammer 13y ago
  This is total nonsense
  - adventured 13y ago
    No it's exactly what caused the massive asset inflation across all major assets in the US economy in the last four years. Look up the perfect correlation between the S&P and the Fed's pomo shots, and its balance sheet expansion. But don't take my word for it. Recently the US Treasury conveniently wrote a paper admitting that the Fed was responsible for spurring the asset inflation. The dollar has lost 97% of its value, according to the Fed, over the course of a century. That was before they were knee deep into the economy 'printing' trillions - having increased their balance sheet by 300% in five years. How can they ever stop printing while the US Govt. runs a $700+ billion deficit? They can't. The outcome is obvious. The Fed intentionally re-inflated assets, because it's the only gimmick they have left. Once you lower interest rates to zero, there's nowhere else to go but to intentionally try to spur asset inflation and generate a fake wealth effect, which the Fed has done two other times in the prior decades. They use their POMO program, along with mortgage purchases and cheap interest rates to inflate the stock market and the real estate market. It's real simple. There has been no job recovery. There has been no manufacturing boom. There has been no improvement in the welfare and poverty picture. There has been no improvement in incomes. And we're still missing seven million full time jobs, and millions have fallen out of the labor force. So why are asset prices booming? The answer to that is obvious as well.
    - nerfhammer 13y ago
      QE myths: http://business.time.com/2013/09/18/taper-tantrums-3-myths-about-quantitative-easing/ http://business.time.com/2013/09/18/taper-tantrums-3-myths-a...

bct 13y ago

> Anybody who buys TWTR is making an informed decision If only.

nine_k 13y ago

Google had a solid, well-working monetization mechanism: AdWords, released in 2000, 4 years before the IPO. It was easy to see how it performs financially and why it might skyrocket. Can someone enlighten me how Twitter might earn some steady money?

olefoo 13y ago
Yes. Think about all of the paywalled news outlets out there. Think about how many journalists tweet their stories to drive their personal brand. Think about immensely popular twitter accounts and sought after domain experts. Think about the fact that someone who is very entertaining on twitter needs to leave twitter to ( consult, sell t-shirts, produce media, etc. ) if they want to make money. Think about how t.co makes it possible for them to track url usage attributable to them. Remember when micropayments for media was a buzzword? If you still don't get why twitter might be undervalued. I would be happy to to explain it to you with, charts, graphs and a full research report; for a fee.
- silverbax88 13y ago
  I don't want to sound dismissive, but this is very similar to the 'eyeballs' strategies that were bandied about prior to 2000. If a million people use a link to go to a paywall site, that's awesome - except as of now the data shows that Twitter users don't become buyers as a general rule. Can they make money? Sure. Can they make money with ads? Sure. Can they make money with massive vertical media funnels? Well...what will make them more successful than Apple, Google, Microsoft and TimeWarner who have all been trying to do the same exact thing for many years? Not saying they won't...just saying I'd like to see some track record before I buy into an idea that no one has been able to make work yet.
  - hayksaakian 13y ago
    From using their ad service I can say: their demographic targeting is razor sharp, you can target followers of specific users, or people within any of the standard demographics. You can also target people by specific interests. I think this is the AdWords for branding
  - nl 13y ago
    Can they make money? Sure. Can they make money with ads? Sure. Can they make money with massive vertical media funnels? Well...what will make them more successful than Apple, Google, Microsoft and TimeWarner who have all been trying to do the same exact thing for many years? Err.. I'm not sure about Apple or TimeWarner, but Google and Microsoft have been very successful at making display advertising work well. Check out the IAB 2013 Half Yearly report[1]. Some key quotes: Display-related advertising accounted for $3.1 billion or 30% of total revenues during Q2 2013, up 8% from the $2.9 billion (33% of total) reported in Q2 2012. Q2 2013 Display-related advertising includes Display/Banner Ads (19% of revenues, or $1.9 billion), Rich Media (3% or $329 million), Digital Video (7% or $676 million), and Sponsorship (2% or $181 million). Note that they aren't counting mobile advertising as display advertising (even though much of it effectively is). Mobile revenues continued to quickly gain share, representing 15% of total revenues in HY 2013, as compared with 9% reported in FY 2012 and 5% in FY 2011. First half 2013 Mobile revenues represent 90% of total 2012 Mobile revenues. Note that Twitter has particularly strong mobile usage. Many people don't realize that people still pay a lot for "eyeballs": At 65% of advertising revenues through half-year 2013, performance-based pricing appears to have leveled off, even experiencing a slight decline from its high of 66% for the full year 2012. As a result, CPM/impression-based pricing gained slightly, up to 33% for the half-year, its highest point since 2010. [1] http://www.iab.net/media/file/IABInternetAdvertisingRevenueReportHY2013FINALdoc.pdf http://www.iab.net/media/file/IABInternetAdvertisingRevenueR...
    - silverbax88 13y ago
      Who said anything about not making display advertising work? I'm talking about the whole vertical integration to television that so many analysts are basing their 75X revenues pricing on.
Spooky23 13y ago
Partnerships with TV networks seem to be the big thing now. I guess lots of people cozy up to their iPad and post reactions to TV shows in real time on Twitter with hashtags -- driving live viewing of TV, watching of ads and giving marketers another way of delivering coordinated mesages to people.
- benburleson 13y ago
  I see you listen to NPR also.
pbreit 13y ago
A lot of investors actually prefer a less known upside.
pbreit 13y ago
Advertising will be a major component. But I think there are some other powerful revenue-making opportunities around data and services. Many investors appreciate a blurrier future since it can lead to more upside.
- oneeyedpigeon 13y ago
  I would love to see twitter take the other route: no advertising, charge for the service. Keep the quality of the experience high (which advertising will certainly not do), and it will be more than worth a dollar or two per year to millions of people. Offer a premium service to high-value individuals and businesses (quite what that offer is, of course, I'm not entirely sure). Advertising online is, I believe, in the long run, going to be tricky to maintain as a source of income, even for content-centric sites. For service-oriented sites, such as twitter, I just don't think it's the right approach, especially given a nice API which allows the ads to be bypassed. OK, I'm sure plenty of people will disagree, but it would be really nice for a high profile social network to just try this and see if they can make it work (I know linkedin's model is essentially this, but I see them as a very different beast from the general interest communication juggernaut that is twitter).
clarky07 13y ago
Well, they already have hundreds of millions in revenue that has been growing 100% a year. It's not like they've never made a dime. The other responses here give a few ideas for new revenue streams as well.

nine_k 13y ago

Regarding tax dollars: please take a moment and google for "QE3 stimulus package". If not tax dollars, it's inflation dollars, which is an indirect tax anyway.

nerfhammer 13y ago
This is total nonsense
- adventured 13y ago
  No it's exactly what caused the massive asset inflation across all major assets in the US economy in the last four years. Look up the perfect correlation between the S&P and the Fed's pomo shots, and its balance sheet expansion. But don't take my word for it. Recently the US Treasury conveniently wrote a paper admitting that the Fed was responsible for spurring the asset inflation. The dollar has lost 97% of its value, according to the Fed, over the course of a century. That was before they were knee deep into the economy 'printing' trillions - having increased their balance sheet by 300% in five years. How can they ever stop printing while the US Govt. runs a $700+ billion deficit? They can't. The outcome is obvious. The Fed intentionally re-inflated assets, because it's the only gimmick they have left. Once you lower interest rates to zero, there's nowhere else to go but to intentionally try to spur asset inflation and generate a fake wealth effect, which the Fed has done two other times in the prior decades. They use their POMO program, along with mortgage purchases and cheap interest rates to inflate the stock market and the real estate market. It's real simple. There has been no job recovery. There has been no manufacturing boom. There has been no improvement in the welfare and poverty picture. There has been no improvement in incomes. And we're still missing seven million full time jobs, and millions have fallen out of the labor force. So why are asset prices booming? The answer to that is obvious as well.
  - nerfhammer 13y ago
    QE myths: http://business.time.com/2013/09/18/taper-tantrums-3-myths-about-quantitative-easing/ http://business.time.com/2013/09/18/taper-tantrums-3-myths-a...