6 ms·

Is Twitter Successful?

13 points by tortilla 17y ago

alexandros 17y ago
What worries me with 'growth over revenue' is that they are presented as a tradeoff. The implication is that they are essentially operating a loss leader to trap users in and then they will degrade the free produt to extract revenues. As a twitter user, this makes me look to the exits.
- jeremymcanally 17y ago
  But for a service that's 100% social (i.e., they offer little to no value without the content that their users offer), it's very very difficult to put revenue on the same level or above growth. The growth is essential to gaining the momentum required to monetize a social service like that. I don't think you have to degrade a product when adding premium features. For example, I'd pay a few bucks to have lists or user groups in my stream. But adding that feature at a pay level doesn't degrade the service I already have. I really think Twitter is smart enough to avoid degrading the service while adding value. They've done well with that so far, at least.
RyanMcGreal 17y ago
They may be growing oranges, but they're not selling any oranges. Say what you want, but sooner or later that's going to present a problem for the company's viability.
- Semiapies 17y ago
  Exactly. This is dotcom bubble logic - we don't need an income stream, we have investors. Amazon ran a loss for a long time, but at every point in time, they were actually selling product and getting money. This Porter guy may say Twitter is wildly successful because they're a business that's not about such peasant concerns as making money, but of Amazon and Twitter, which is more likely to be around in 10 years?
  - gsmaverick 17y ago
    The Amazon comparison is terrible. They were still losing money! Whether they are doing it by giving something away for free or by selling on ridiculously tight margins they are still losing money!
    - gloob 17y ago
      The difference is that Amazon had a clear way to make money: make their revenue stream bigger. That doesn't and won't work for Twitter, because Twitter doesn't have a revenue stream to make bigger. Saying they're the same thing is like saying that the U.S. and Afghanistan are the same, because they both had elections. Well, true, but in one place the elections were not rigged, and in the other there's a good chance they were. "They still had an election!" of course, but there are significant practical differences.
    - Semiapies 17y ago
      No, your attention to the issue is about a decade out of date. Amazon hasn't been losing money for years; they posted over $200 million profit for 2008. They had a working revenue stream, which meant that when they'd reached a point of sufficient growth, they had a slew of things they could reasonably adjust to achieve profitability. Twitter has no revenue stream. Twitter can't change prices or restrict spending to become profitable - it has no prices! They would have to actually create a business in order to become profitable.
  - RyanMcGreal 17y ago
    They might have a top-secret business plan under which they grow to a certain critical size and then start earning money like crazy through a specific channel that requires critical mass to become viable, in which case more power to them. However, if they don't have a secret revenue ace-in-the-hole and their business plan is merely to get really big and then, you know, like, start thinking about how to make some money somehow...I certainly wouldn't risk my money on that.
    - Semiapies 17y ago
herval 17y ago
they are most definitely VERY successful as a brand...
- gcb 17y ago
  product no one would pay for. but a strong brand. maybe after they go bankrupt for the 1st time they can start selling jackets and keychains for a come back, like harley davidson in the 80's
- Semiapies 17y ago
  Wasn't Pets.com, too?
  - herval 17y ago
    I'm not sure people heard of pets.com outside USA. I never did, for instance. As for Twitter, people have heard of it in EVERY single country I've been lately (including some in Europe, Asia and South America)... But relatively (to it's time and the size of internet), yes - pets.com was probably successful at that too... :-)
    - bad_user 17y ago
      I've heard of Pets.com and I'm in Europe :)
      - herval 17y ago
        did I ever say you wouldn't...?
redorb 17y ago
You can't be successful until you have some sort of finality; a cash out, a merger... something that adds to the bottom line (besides investors). Twitter is building a huge base on which to make a pretty good size company that does some pretty cool things... So my answer is "So far; they are successful"

13 points by tortilla 17y ago

What worries me with 'growth over revenue' is that they are presented as a tradeoff. The implication is that they are essentially operating a loss leader to trap users in and then they will degrade the free produt to extract revenues. As a twitter user, this makes me look to the exits.

jeremymcanally 17y ago
But for a service that's 100% social (i.e., they offer little to no value without the content that their users offer), it's very very difficult to put revenue on the same level or above growth. The growth is essential to gaining the momentum required to monetize a social service like that. I don't think you have to degrade a product when adding premium features. For example, I'd pay a few bucks to have lists or user groups in my stream. But adding that feature at a pay level doesn't degrade the service I already have. I really think Twitter is smart enough to avoid degrading the service while adding value. They've done well with that so far, at least.

RyanMcGreal 17y ago

They may be growing oranges, but they're not selling any oranges. Say what you want, but sooner or later that's going to present a problem for the company's viability.

Semiapies 17y ago
Exactly. This is dotcom bubble logic - we don't need an income stream, we have investors. Amazon ran a loss for a long time, but at every point in time, they were actually selling product and getting money. This Porter guy may say Twitter is wildly successful because they're a business that's not about such peasant concerns as making money, but of Amazon and Twitter, which is more likely to be around in 10 years?
- gsmaverick 17y ago
  The Amazon comparison is terrible. They were still losing money! Whether they are doing it by giving something away for free or by selling on ridiculously tight margins they are still losing money!
  - gloob 17y ago
    The difference is that Amazon had a clear way to make money: make their revenue stream bigger. That doesn't and won't work for Twitter, because Twitter doesn't have a revenue stream to make bigger. Saying they're the same thing is like saying that the U.S. and Afghanistan are the same, because they both had elections. Well, true, but in one place the elections were not rigged, and in the other there's a good chance they were. "They still had an election!" of course, but there are significant practical differences.
  - Semiapies 17y ago
    No, your attention to the issue is about a decade out of date. Amazon hasn't been losing money for years; they posted over $200 million profit for 2008. They had a working revenue stream, which meant that when they'd reached a point of sufficient growth, they had a slew of things they could reasonably adjust to achieve profitability. Twitter has no revenue stream. Twitter can't change prices or restrict spending to become profitable - it has no prices! They would have to actually create a business in order to become profitable.
- RyanMcGreal 17y ago
  They might have a top-secret business plan under which they grow to a certain critical size and then start earning money like crazy through a specific channel that requires critical mass to become viable, in which case more power to them. However, if they don't have a secret revenue ace-in-the-hole and their business plan is merely to get really big and then, you know, like, start thinking about how to make some money somehow...I certainly wouldn't risk my money on that.
  - Semiapies 17y ago

herval 17y ago

they are most definitely VERY successful as a brand...

gcb 17y ago
product no one would pay for. but a strong brand. maybe after they go bankrupt for the 1st time they can start selling jackets and keychains for a come back, like harley davidson in the 80's
Semiapies 17y ago
Wasn't Pets.com, too?
- herval 17y ago
  I'm not sure people heard of pets.com outside USA. I never did, for instance. As for Twitter, people have heard of it in EVERY single country I've been lately (including some in Europe, Asia and South America)... But relatively (to it's time and the size of internet), yes - pets.com was probably successful at that too... :-)
  - bad_user 17y ago
    I've heard of Pets.com and I'm in Europe :)
    - herval 17y ago
      did I ever say you wouldn't...?

redorb 17y ago

You can't be successful until you have some sort of finality; a cash out, a merger... something that adds to the bottom line (besides investors). Twitter is building a huge base on which to make a pretty good size company that does some pretty cool things... So my answer is "So far; they are successful"