6 ms·

Any chance Twitter could be taken over by Facebook? Looks like they've figured out the monetization side of things and TWTR is now at a modest market cap.

kondro 12y ago
Facebook doesn't really gain anything by acquiring Twitter except a loss-making entity with a very large cross-over when it comes to userbase.
- x0x0 12y ago
  twitter is profitable, depending on metric [1]; their rationale is [2]. it's also monetizing better: It generated $1.77 for every thousand timeline views in advertising revenue, up 83% form (sic) the prior year's rate [3] [1] http://www.theverge.com/2014/10/27/7079277/twitter-q3-2014-earnings http://www.theverge.com/2014/10/27/7079277/twitter-q3-2014-e... [2] https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=878170 https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=... [3] http://www.fool.com/investing/general/2014/10/27/twitter-inc-earnings-here-comes-the-sequential-squ.aspx http://www.fool.com/investing/general/2014/10/27/twitter-inc...
  - _almosnow 12y ago
    revenue != profit they've been operating w/ a net loss since (probably) forever
  - adventured 12y ago
    Twitter is extremely unprofitable, in every possible regard. Operating income: 2013: -$635m; 2012: -$77m; 2011: -$127m Net income: 2013: -$645m; 2012: -$79m; 2011: -$128m The same general result holds true for their most recent quarters. They're losing tons of money and vaporizing cash. Most likely they're going to get severely squeezed when the easy money party ends / the stock market falls. They better either be profitable at that point, or have a back-up plan. They certainly wouldn't be the first dotcom cash burner to get crunched when the easy money stopped flowing.
    - notastartup 12y ago
      Remember porsche started to buy up volkswagon with borrowed money? Remember when market took a major dip in 2008 and the capital was suddenly gone. They had no more runway, and volkswagon ended up buying porsche.
    - x0x0 12y ago
      part of these numbers is, I think, a gaap artifact, particularly related to stock based compensation look at their 2013 annual report, page 41 [1]. $841m cash, $1.391B short term investments, $2.35B working capital. They appear, to my reading, to be cash flow positive. Cash flow positive businesses tend not to go out of business. Again, from their 3Q report: As of September 30, 2014, cash, cash equivalents and marketable securities were approximately $3.6 billion, compared to $2.1 billion as of June 30, 2014 [2] That is not a company in danger of going out of business soon baring an advertising crash. [1] http://files.shareholder.com/downloads/AMDA-2F526X/3578573965x0x742484/A418947A-E065-4822-8BD4-00FA8EB4E795/Twitter_2013_Annual_Report_-_FINAL.pdf http://files.shareholder.com/downloads/AMDA-2F526X/357857396... [2] https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=878170 https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=...
      - _almosnow 12y ago
        assets != profit They had 1.2B for funding, then they IPO'ed, then they even made some weird stuff like [1] (which looked like a really desperate 'running out of cash' decision to me), sum all of that stuff up and you can easily explain those 3.6 billion plus all the other money that they had burn. Sure they won't go out of business soon, but they will when all that money's gone. Twitter will be the flagship example of the second dot-com boom. And they deserve it, so many wrong business decisions during these years that you start giving Thiel's pot-smoking theory a good chance. [1] http://www.forbes.com/sites/steveschaefer/2014/09/12/twitter-takes-advantage-of-soaring-stock-with-1-3b-convertible-debt-offering/ http://www.forbes.com/sites/steveschaefer/2014/09/12/twitter...
robomartin 12y ago
Facebook has problems. They are forcing page and group owners to advertise in order to reach their fans by manipulating organic reach and preventing direct communications with page fans. For the most part you can only expect single digit percent reach of page posts to page fans. Boosting posts --paying-- is the only way to reach them all. Page owners don't like this. Many page owners are slowly devising strategies to take their fan base outside of FB. This is particularly problematic when you spend money inside or outside FB to build an audience that, ultimately, FB does not allow you to own. And, again, they make you pay again and again to reach them. Then there's the issue of fake likes or paid likes that fall outside your campaign specifications. You pay for likes from the US and get a barrage of likes from Bangladesh. The next issue is engagement. People like pages because they like the pictures or something else in the ads. After that they have zero engagement with the page. This, coupled with limited reach of posts on your page, means that your posts might reach a bunch of people who are utterly irrelevant to your mission (Bangladesh) or absolutely disengaged (love the pictures). We advertised for a page, reached hundreds of thousand of people and received a real education as to the minefield that FB can be. I am absolutely convinced that the same amount of cash would have produced vastly better results had we spent it on Google ads. We would end-up with a list we could communicate with, groom and grow rather than a page with people who's relevance, targeting and engagement are in question. And, to add insult to injury, we have to pay dearly to reach with each and every message. Yes, to answer the question, we are transitioning our list away from FB as quickly as possible and will not advertise at all after that. Live and learn. We've heard that Twitter can be far better than FB in many regards in terms of reaching and connecting with your audience. I'm sure we'll learn all about that in the next few months.
- jonmaim 12y ago
  Thanks for sharing your experience. May i ask you where and how are you transitioning your list away from FB?
  - robomartin 12y ago
    Where: We are getting people to register on our own website through various incentives (mainly discounts). How: Well, we are spending money to reach our page likes through FB ads and make a compelling case to have them go over to our site and register. It's not easy. My guess is that it might take up to six months to get all the people who are willing to get off FB for a better experience. It's not about spamming them but it is about being able to reach them and engage with them. So, at some level, we only want the people who are actually willing to click away from FB and go through the trouble of registering on our site. If they do that chances are they will actually engage and they'll also be more receptive to our message. That makes it all far more efficient. If you have a FB page with 50,000 likes you might not reach more than 5% --if that-- with any update you post to your page. There is no way to blast an update to your entire list. Not even in a staged manner. Meaning: Send this update to people who liked this page at a rate of 1,000 per day for 50 days. If you want to reach those who liked your page you have to pay. Over and over and over again with every single post you want to reach your audience through the "boost" process. FB is clearly telling you they own your audience. I have to deeply disagree with that. FB does not own the audience that likes, say, the Ford, Audi, Coca Cola or Victoria's Secret pages. Those companies worked very hard and spent lots of money to build and capture an audience. FB is effectively hijacking your audience in an attempt to make money with every message you want to send them. I really hope companies recoil at this in a big way and the whole thing backfires on them. It's wrong. Beyond that, list management is horrid. For example, we wanted to delete nearly 1,000 likes we got from Bangladesh, India and a few other places that had no real relevance or connection to our products. Not sure how they got there because our advertising for page likes clearly defined a US-only audience. One theory I read about is that page like click farms tell their employees to like a wide variety of pages in order to hide the likes-for-hire activity. Anyhow, the ONLY WAY to maintain your list is to use the banning interface and ban each and every user you don't want ONE AT A TIME. You can't even click a bunch of check boxes and then apply an action. You can't export to CSV, mark them and then upload to clean-up your list. So, you write a post, it only reaches 5% of your audience and, by random chance, a bunch of them are from corners of the world that have no relevance whatsoever to what you are doing. It's a royal mess and a total waste of money. I am sure there are many who are doing well with FB ads. I am sure these are very specific use cases that might be so lucrative that paying for noise in your likes and paying to reach the audience over and over again might not be a problem. Oh yes, and then there's the issue of the dumb-ass rules for ads and the even dumber software that checks against those rules. My favorite being the 20% text rule. It is so unreliable that you can actually run an ad, have it approved and half way into your campaign get a message telling you that the ad was disapproved due to violating the 20% rule. The software they are using to check against this is using some kind of crazy voodoo that works half the time. The other half of the time it confuses text on, for example, a product with text outside of it. That's why you end-up seeing ad after ad on FB with stupid stuff like a landscape or a bird flying or whatever, because you can actually try fifteen different generation of ads with text and have every single one of them rejected when the text doesn't even approach 20% usage. Then there's the absolutely terrible feedback when ads are rejected. No reason at all given in most cases. So you have to guess. Is it the 20% rule? Is it the nature of the image? Is it the text in the comment? Is it the link? Is it the call to action? Is it the page it links to? Is it the subject matter? Is it the color of the background? Is it the capitalization? What is it? So you are left guessing with no feedback and NOBODY to contact, even with smoke signals. We had one horrible case of launching a single day discount offer through an ad on FB. A website was built and all related systems and software were in place weeks in advance. The FB ad was put together and staged a week in advance. Approved. The day of the offer the ad turned on and started to run. No more than 15 minutes into the 24 hour run it got kicked out for "violation of TOS". What? We sat there trying to figure out what the heck was going on. We submitted updates at a furious rate to try to shotgun the problem and see where it was. We changed the description, the link the text, the words, the image, the background. We changed everything. We took a beautiful and turned it into the most disgustingly bland thing you've ever seen. Nothing. Nothing could make the ad gain approval. We burned sixteen hours chasing after this. The promotion would have been a complete bust if we hadn't reached out to AdWords and run a bunch of ads about six hours into this mess. We somehow filed a support case with FB. FOUR DAYS LATER we get a message basically saying "Sorry, the ad should have been approved. There was nothing wrong with it. Probably a glitch somewhere. Try again next time." To say I blew a fuse is the understatement of the year. FB Ads might just make this work because of their scale. I don't know many companies in the real world that could behave like this, have such shitty customer service, performance and reliability problems and survive. We'll see what happens. I am certainly not sending them any more of our money once we get our customers away from their clutches. They are OUR customers, not theirs.
adventured 12y ago
Google and Apple are the two most likely acquirers. They'll wait for the shares to fall a lot further yet, as it's worth less than half what it's trading for today. Google remains desperate to play in the social world, and they have a very high specialty at monetizing text. Comically Google would end up buying Twitter on the way down, were they to buy it, leaving them with another social disaster.

kondro 12y ago

Facebook doesn't really gain anything by acquiring Twitter except a loss-making entity with a very large cross-over when it comes to userbase.

x0x0 12y ago
twitter is profitable, depending on metric [1]; their rationale is [2]. it's also monetizing better: It generated $1.77 for every thousand timeline views in advertising revenue, up 83% form (sic) the prior year's rate [3] [1] http://www.theverge.com/2014/10/27/7079277/twitter-q3-2014-earnings http://www.theverge.com/2014/10/27/7079277/twitter-q3-2014-e... [2] https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=878170 https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=... [3] http://www.fool.com/investing/general/2014/10/27/twitter-inc-earnings-here-comes-the-sequential-squ.aspx http://www.fool.com/investing/general/2014/10/27/twitter-inc...
- _almosnow 12y ago
  revenue != profit they've been operating w/ a net loss since (probably) forever
- adventured 12y ago
  Twitter is extremely unprofitable, in every possible regard. Operating income: 2013: -$635m; 2012: -$77m; 2011: -$127m Net income: 2013: -$645m; 2012: -$79m; 2011: -$128m The same general result holds true for their most recent quarters. They're losing tons of money and vaporizing cash. Most likely they're going to get severely squeezed when the easy money party ends / the stock market falls. They better either be profitable at that point, or have a back-up plan. They certainly wouldn't be the first dotcom cash burner to get crunched when the easy money stopped flowing.
  - notastartup 12y ago
    Remember porsche started to buy up volkswagon with borrowed money? Remember when market took a major dip in 2008 and the capital was suddenly gone. They had no more runway, and volkswagon ended up buying porsche.
  - x0x0 12y ago
    part of these numbers is, I think, a gaap artifact, particularly related to stock based compensation look at their 2013 annual report, page 41 [1]. $841m cash, $1.391B short term investments, $2.35B working capital. They appear, to my reading, to be cash flow positive. Cash flow positive businesses tend not to go out of business. Again, from their 3Q report: As of September 30, 2014, cash, cash equivalents and marketable securities were approximately $3.6 billion, compared to $2.1 billion as of June 30, 2014 [2] That is not a company in danger of going out of business soon baring an advertising crash. [1] http://files.shareholder.com/downloads/AMDA-2F526X/3578573965x0x742484/A418947A-E065-4822-8BD4-00FA8EB4E795/Twitter_2013_Annual_Report_-_FINAL.pdf http://files.shareholder.com/downloads/AMDA-2F526X/357857396... [2] https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=878170 https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=...
    - _almosnow 12y ago
      assets != profit They had 1.2B for funding, then they IPO'ed, then they even made some weird stuff like [1] (which looked like a really desperate 'running out of cash' decision to me), sum all of that stuff up and you can easily explain those 3.6 billion plus all the other money that they had burn. Sure they won't go out of business soon, but they will when all that money's gone. Twitter will be the flagship example of the second dot-com boom. And they deserve it, so many wrong business decisions during these years that you start giving Thiel's pot-smoking theory a good chance. [1] http://www.forbes.com/sites/steveschaefer/2014/09/12/twitter-takes-advantage-of-soaring-stock-with-1-3b-convertible-debt-offering/ http://www.forbes.com/sites/steveschaefer/2014/09/12/twitter...

robomartin 12y ago

Facebook has problems. They are forcing page and group owners to advertise in order to reach their fans by manipulating organic reach and preventing direct communications with page fans. For the most part you can only expect single digit percent reach of page posts to page fans. Boosting posts --paying-- is the only way to reach them all. Page owners don't like this. Many page owners are slowly devising strategies to take their fan base outside of FB. This is particularly problematic when you spend money inside or outside FB to build an audience that, ultimately, FB does not allow you to own. And, again, they make you pay again and again to reach them. Then there's the issue of fake likes or paid likes that fall outside your campaign specifications. You pay for likes from the US and get a barrage of likes from Bangladesh. The next issue is engagement. People like pages because they like the pictures or something else in the ads. After that they have zero engagement with the page. This, coupled with limited reach of posts on your page, means that your posts might reach a bunch of people who are utterly irrelevant to your mission (Bangladesh) or absolutely disengaged (love the pictures). We advertised for a page, reached hundreds of thousand of people and received a real education as to the minefield that FB can be. I am absolutely convinced that the same amount of cash would have produced vastly better results had we spent it on Google ads. We would end-up with a list we could communicate with, groom and grow rather than a page with people who's relevance, targeting and engagement are in question. And, to add insult to injury, we have to pay dearly to reach with each and every message. Yes, to answer the question, we are transitioning our list away from FB as quickly as possible and will not advertise at all after that. Live and learn. We've heard that Twitter can be far better than FB in many regards in terms of reaching and connecting with your audience. I'm sure we'll learn all about that in the next few months.

jonmaim 12y ago
Thanks for sharing your experience. May i ask you where and how are you transitioning your list away from FB?
- robomartin 12y ago
  Where: We are getting people to register on our own website through various incentives (mainly discounts). How: Well, we are spending money to reach our page likes through FB ads and make a compelling case to have them go over to our site and register. It's not easy. My guess is that it might take up to six months to get all the people who are willing to get off FB for a better experience. It's not about spamming them but it is about being able to reach them and engage with them. So, at some level, we only want the people who are actually willing to click away from FB and go through the trouble of registering on our site. If they do that chances are they will actually engage and they'll also be more receptive to our message. That makes it all far more efficient. If you have a FB page with 50,000 likes you might not reach more than 5% --if that-- with any update you post to your page. There is no way to blast an update to your entire list. Not even in a staged manner. Meaning: Send this update to people who liked this page at a rate of 1,000 per day for 50 days. If you want to reach those who liked your page you have to pay. Over and over and over again with every single post you want to reach your audience through the "boost" process. FB is clearly telling you they own your audience. I have to deeply disagree with that. FB does not own the audience that likes, say, the Ford, Audi, Coca Cola or Victoria's Secret pages. Those companies worked very hard and spent lots of money to build and capture an audience. FB is effectively hijacking your audience in an attempt to make money with every message you want to send them. I really hope companies recoil at this in a big way and the whole thing backfires on them. It's wrong. Beyond that, list management is horrid. For example, we wanted to delete nearly 1,000 likes we got from Bangladesh, India and a few other places that had no real relevance or connection to our products. Not sure how they got there because our advertising for page likes clearly defined a US-only audience. One theory I read about is that page like click farms tell their employees to like a wide variety of pages in order to hide the likes-for-hire activity. Anyhow, the ONLY WAY to maintain your list is to use the banning interface and ban each and every user you don't want ONE AT A TIME. You can't even click a bunch of check boxes and then apply an action. You can't export to CSV, mark them and then upload to clean-up your list. So, you write a post, it only reaches 5% of your audience and, by random chance, a bunch of them are from corners of the world that have no relevance whatsoever to what you are doing. It's a royal mess and a total waste of money. I am sure there are many who are doing well with FB ads. I am sure these are very specific use cases that might be so lucrative that paying for noise in your likes and paying to reach the audience over and over again might not be a problem. Oh yes, and then there's the issue of the dumb-ass rules for ads and the even dumber software that checks against those rules. My favorite being the 20% text rule. It is so unreliable that you can actually run an ad, have it approved and half way into your campaign get a message telling you that the ad was disapproved due to violating the 20% rule. The software they are using to check against this is using some kind of crazy voodoo that works half the time. The other half of the time it confuses text on, for example, a product with text outside of it. That's why you end-up seeing ad after ad on FB with stupid stuff like a landscape or a bird flying or whatever, because you can actually try fifteen different generation of ads with text and have every single one of them rejected when the text doesn't even approach 20% usage. Then there's the absolutely terrible feedback when ads are rejected. No reason at all given in most cases. So you have to guess. Is it the 20% rule? Is it the nature of the image? Is it the text in the comment? Is it the link? Is it the call to action? Is it the page it links to? Is it the subject matter? Is it the color of the background? Is it the capitalization? What is it? So you are left guessing with no feedback and NOBODY to contact, even with smoke signals. We had one horrible case of launching a single day discount offer through an ad on FB. A website was built and all related systems and software were in place weeks in advance. The FB ad was put together and staged a week in advance. Approved. The day of the offer the ad turned on and started to run. No more than 15 minutes into the 24 hour run it got kicked out for "violation of TOS". What? We sat there trying to figure out what the heck was going on. We submitted updates at a furious rate to try to shotgun the problem and see where it was. We changed the description, the link the text, the words, the image, the background. We changed everything. We took a beautiful and turned it into the most disgustingly bland thing you've ever seen. Nothing. Nothing could make the ad gain approval. We burned sixteen hours chasing after this. The promotion would have been a complete bust if we hadn't reached out to AdWords and run a bunch of ads about six hours into this mess. We somehow filed a support case with FB. FOUR DAYS LATER we get a message basically saying "Sorry, the ad should have been approved. There was nothing wrong with it. Probably a glitch somewhere. Try again next time." To say I blew a fuse is the understatement of the year. FB Ads might just make this work because of their scale. I don't know many companies in the real world that could behave like this, have such shitty customer service, performance and reliability problems and survive. We'll see what happens. I am certainly not sending them any more of our money once we get our customers away from their clutches. They are OUR customers, not theirs.

adventured 12y ago

Google and Apple are the two most likely acquirers. They'll wait for the shares to fall a lot further yet, as it's worth less than half what it's trading for today. Google remains desperate to play in the social world, and they have a very high specialty at monetizing text. Comically Google would end up buying Twitter on the way down, were they to buy it, leaving them with another social disaster.