10 years later, Twitter still isn't making money | Hacker News Reader

10 years later, Twitter still isn't making money

money.cnn.com

93 pointschirau86 comments

Twitter has been giving away more and more ground to Facebook. Facebook groups are not even suited for a lot of things that they have become and twitter should have been there. Twitter needs to look at what the use cases are:

- Customer Support, twitter is customer support for a lot of companies and being public makes grievance redressal possible. They just need to get better tools and charge companies for being their support interface. The companies may not have choices.

- Events. Twitter is the heart of events. Create tools to manage public events and charge for them. Give something to the organizers and take money for it.

- Pages. Give an alternative business model to facebook. Its too big to fight right now. Give a paid version of facebook pages with a promise of not losing organic growth. Brands spent a lot on getting tons of likes that are not useful any more. Followers are still somewhat valuable. Make pages interesting for brands (give them something to justify the payment).

- Advertising is not always the solution. Customize for the key use cases.

- Open up. Facebook is the AOL of social. Someone needs to step up and be as open as the internet. Aren't you suffocating behind the closed doors? Did you really have a reason for closing them?

I know twitter isn't listening.

The customer support tools is a great idea. Twitter should optimize for how their users are actually using Twitter.

Other ideas:

- "Enterprise Twitter" for private communications and sharing status updates. Something like Yammer or Facebook at Work or even Slack, though big companies might not want a consumer brand associated with "goofing off" inside their enterprise.

- Flattr-like micropayments to let people "tip" a favorite tweet. This could encourage more people to tweet as a source of income. Like PayPal, Twitter could generate interest off people's tip accounts.

I would pay for a TweetDeck subscription. They have consistently acquired products and have ignored them. It is a shame they don't invest more resources on TweetDeck. I am just an end user and I find TweetDeck to be one of the only sane ways to use Twitter. I simply cannot imagine how beneficial TweetDeck would be as a tool for someone who does marketing/handles brands.

A recommended tweets/articles tab a la Pocket's recommendations feed would also bring in a lot of customers for their promoted tweets. The problem isn't ads/sponsored tweets, its how poorly Twitter chooses to present them.

Customer Support, twitter is customer support for a lot of companies and being public makes grievance redressal possible. They just need to get better tools and charge companies for being their support interface. The companies may not have choices.

Twitter support is common in CRM already. The company I work for has it in our products and AFAIK so do many others in the space.

Best suggestion list I've come across. Please Twitter think about this stuff.

"Advertising is not always the solution."

Totally agree. But many/most of the proposed solutions typically involve charging the users for basic usage which is completely stupid for a site/service dependent on widespread user-generated content.

> - Customer Support

They launched better tools in February. http://www.marketingmagazine.co.uk/article/1384197/twitter-b...

Twitter users have money because adults have money. The inability to make any value proposition worth paying for is almost admitting you're worthless.

Per James Altucher, for my 10 ideas a day exercise:

- Pay-to-view, pay-to-subscribe twitter accounts. Exclusivity always sells.

- Twitter tools/analytics for fees.

- Developer tools for fees.

- Pay with your twitter account (we already login).

- Paid tier for advanced users who manage multiple accounts.

- BUY straight off a tweet.

- Sell API access to power users (rate limit tiers).

- Remove ads for a fee.

- Push twitter search, and sell more ads on increased searches.

- Sell themselves to facebook.

These are all pretty obvious, so they must have reasons not so obvious not to do them. One would guess twitter's brainstorm meetings are veto-fests just from their lack of interest in doing anything interesting or progressive... but maybe they just don't sweat it because they're sitting on 3B cash. (that must be it)

Most of these are "tried and failed again and again" attempts that have been "obvious" since 1999.

Sure, they could sell "no ads", "exclusive accounts", "developer tools", etc. None of these will entice enough users to be remotely worth it -- as it hasn't worked in most other platforms.

This is for something at the scale of Basecamp or Automattic to make money, not Twitter.

Your probably correct, none of these solutions in this thread could actually beat the advertising model even if that isn't profitable for them and trying them isn't worth the risk. It just seems weird to me that twitter basically owns the fanclub for every celebrity in the world and can't monetize access.

>It just seems weird to me that twitter basically owns the fanclub for every celebrity in the world and can't monetize access.

I think the problem is they don't own the fanclub. Only part of it.

Fans also go to: the artist's webpage, the artists YouTube channel (or YT in general), the artist's Facebook, and places like Spotify, Apple Music etc, even places like Reddit for AMA, news sites for interviews, etc.

If Twitter had managed to create and provide a full blown artist/entity "fanclub" experience they would probably fare much better. Just seeing artists "tweets" wont cut it.

Right. If there was a monetization model that worked as well as ads, they would do it in a heartbeat. And so would the entire web. Unfortunately that doesn't exist yet...

No one who runs a web site actually likes putting ads on it. They detract from the content, affect usability and it's more overhead. But it's done because it's the only thing that pays for the site's existence.

I can see how none of these would be the silver bullet, but I can't see how scale is the problem. If you're too big, then, what? Are you saying their burden for profit is too big? The burden they have a reputation for ignoring? And yes, many businesses employing various models have failed, but none of them were twitter. No one is twitter.

Part of it might be the silver bullet syndrome with a hint of exceptionalism. You save it all for that one perfect "exceptional" solution because anything else would be beneath you. Except, how do you know one even exists, or has to exist? Why not just make incremental progress, and run with what takes off? They seem to have chosen ads as their silver bullet, but it failed to exceed expectations. Now what?

The lack of experimentation in the area of services seems almost dysfunctional compared to their willingness to experiment with the interface, their fonts, their top page... all of which are far from exceptional.

What you want from a company like Twitter is at minimum the appearance of effort, of vision, and of competence. Wow, I'm not sure any of those apply right now... No wonder the CEO fired all those people.

>I can see how none of these would be the silver bullet, but I can't see how scale is the problem.

In two senses:

1) Regardless of scale, those solutions don't bring much money in. Twitter's bigger scale means they can bring more money than for a smaller company, but Twitter's scale also means it's operating expenses and churn are much higher for them to make a difference.

2) Twitter's value is in its user base, which is staying given that Twitter doesn't alienate them, which some of those solutions do. In this case it's not really the number of users that's the issue, but the kind of users that you attrack.

1) But don't they also have an advantage with economies of scale? Maybe anything below x million isn't worth it, but cost-wise they should definitely have an advantage. And why not try them at least.

2) Right. Except ads definitely alienate users and detract from the experience. So the solution they've chosen isn't necessarily a decision conscious of this.

None of the items in my list really detract from existing user experience. They're all extras. If Kanye decides to charge $100 because he can, that's on Kanye alienating his users, not twitter.

Building capabilities and increasing capacity seems like a clear path of progress to me, except twitter has yet to step foot in that direction it seems. Tons of money is being made on twitter, except by twitter. Very strange.

Of course, having tons of cash in the bank is the perfect excuse to not do anything. Waiting for an epiphany maybe... Everyone is waiting.

And there lies Twitter's main problem, along with a lot of other startups. Many tech companies should just be small or medium sized. The underlying opportunity was not as enormous as investors predicted. But they've raised billions of dollars now, so they have to at least appear to be trying to force the issue.

At this point, they'd have to pay me as a developer to ever do anything on their API again.

Haven't they just about alienated all developers at this point with their ridiculous token system?

Not just that. They keep changing the capabilities/limits, have gotten harder to reach over the years, and have done some pretty direct back-stabbing things to developers and shut down good projects. Unless you're willing to pay them huge money, then getting stuff like Firehose access is impossible.

Here is my vision for twitter: copy the patreon/twitch/kickstarter model which you should of lead from the beginning. Why can't I subscribe to @lebron_james for 5$ a year and get exclusive lebron james emotes that can be used on twitter? Then @lebron_james has giveaways, product bonus codes, exclusive subscriber only tweets etc. Exclusivity is the new product and people will pay for it. Then lebron's social media team actually has something to do, paying customers, and an incentive to increase quality of his presence on twitter.

If people could sub to @lebron_james for 20$ a year and it got me in ticket/product giveaways, fancy lebron james emotes, a free sneak peak at the next kanye album, removed ads when viewing his feed, and the odd exclusive sub only tweet would people do it?

If the Patreon model were as simple as clicking a button on a user's twitter, I'd probably use it more. I think you're onto something here.

Twitter is a great product that lacks an effective business model. A similarly influential product that has been used widely for many years (Wikipedia) didn't have to deal with this problem because they are a non-profit.

Maybe the only way to save Twitter the product is to kill Twitter the business.

I don't think Twitter will receive the kind of donations Wikipedia does, from either individuals or institutions. The increasingly toxic nature of discourse on Twitter (whether you agree with what people are saying in a particular instance or not, most viewpoints end up being accompanied with death threats and doxing) makes it unlikely they can make a successful case for filling an important need of humanity.

Frankly i see that kind of behavior spreading across the net in recent years.

I find myself thinking it started with Anonymous getting a bunch of press for similar antics. And over time other individuals and groups have adopted them to further their own goals.

Hell, some of it may well be organized as a kind of online cointelpro.

I've commented on this in the past so here's the short version (long version here https://news.ycombinator.com/item?id=11077269):

As heretical as these sound, I think there are only three ways for Twitter to generate significant profits (and they all carry significant drawbacks):

- start charging for API calls above some threshold (i.e. charge for market research)

- start charging commercial entities based on number of followers (or volume of tweets)

- use adsense (better user data linkability)

tl;dr - Twitter creates significant value. But it's difficult for them to capture at least some of that value as profit (unlike Facebook).

_use adsense (better user data linkability)_

The problem is that if twitter is stripped down to a protocol/platform, you can't really force ads in there. It's something that can be put in clients. That's what got them in trouble before.

Good point. It's a bad example. In hindsight, what I was trying to get at in the third idea was slightly different to the other two. The first two are methods to capture some of the value they generate. But it's a risky proposition IMHO; when capturing value some of it will be destroyed (kind of like how taxation causes dead-weight loss). There's a possibility that the value proposition hits zero or goes negative, at which point Twitter is dead.

The third, less risky, option would be to capture data in adjacent markets (probably via start-up acquisition). If they capture adjacent data that, when combined with existing holdings, the value they can offer to the 'money' side of their platform (e.g. advertisers, developers) increases more than linearly.

At which point it's safer to 'tax' the money side of their market. Personally, I'd go for advertisers first: unlike developers, advertisers don't increase platform value for the other side of their market (users).

Twitter is suffering from "nostalgia" syndrome.

They keep talking about how they were the first at such and such thing. About how they invented this and that thing.

This is the reason why Steve Jobs had the Apple museum removed from 1 Infinite Loop.

They need to start looking at how competition is eating their lunch, instead of living in the past.

Looking at Twitter's 10-K as an ongoing business:

    Current liquid assets: $4,381,792,000
    Net loss for year:     $  521,031,000

    Time to live:               8.4 years

Twitter is a public company with one class of stock. It's ripe for a takeover.[1] Market cap is about $11 billion today, so a straight liquidation is out, but a takeover with a downsizing is likely.

[1] http://www.fastcompany.com/3055735/fast-feed/twitter-is-ripe...

Unfortunately, Twitter's user facing technology has been declining in quality. It's too bad because I like twitter a lot. I can report the following issues:

1) many links to deep inside twitter (eg: user's feed or a particular tweet) will actually bring me to my twitter home page.

2) android app destroys the battery. This is true of many social media apps, but unlike facebook, twitter's mobile web app is barely usable. It keeps insisting that I get the native app and it's extremely clunky and slow. Also, many features aren't there, particularly twitter search.

Back when they were more open with their api and there were alternative clients it was a better experience.

I know none of this has anything to do with their lack of a business model. Also, I don't want to discount their contributions with bootstrap and the big data stuff they've done. Hopefully they won't end up like Yahoo.

Have you tried turning down the sync interval (located in Settings > Notifications)?

That tremendously helped my battery usage.

If there were functioning micro-payments system on the net I suspect this would have turned out a lot different. Customers would be less angry paying $1/month for the service (230M users, ~700M in costs per quarter ~= $1/user/month). They might even be able to cut that by 75% or more if they just stuck to their core competency, which is communications, not advertising.

$1/mo isn't micropayments, it is easily charged by credit card mobile phone , with auto recurring

This conversation has been re-hashed ad nauseum over the past 6 months. My take on it remains the same -- their revenue is fine. They need to reduce costs.

Twitter needs to market itself more as a platform. If HN had "its own twitter" and SO had "its own twitter" and BBC had "its own twitter" I'd probably have accounts on all of them. If those could be aggregated, but still kept independent, even better. There needs to be a layer somewhere between "Twitter" and "user". I still like twitter a lot, but have to admit I'm feeling it less these days.

It sounds like email, but limited to 140 characters!

So the question on my mind after reading these kinds of articles about Twitter on a regular basis for years now is this one:

what does Twitter think the value of Twitter is? do they have an idea but won't say it (vis a vis charging money for it) or do they just not even know?

I'd love a federated alternative to Twitter. If Apple, Google and various Linux people all agreed to bundle a compatible client into their operating systems, it would have a chance at overcoming network effects.

Classic twitter - the ads just aren't effective. As a marketer I want to spend on new channels but there needs to be an ROI.

So as a marketer, how would you pitch Twitter differently to make it more lucrative?

Wrong question. This is like asking "As a carpenter, how would you use this shoe to hammer in a nail?"

Twitter, as it has evolved (or been driven depending how much you trust the vision of its management) is not a lucrative platform. It needs either to change how it connects payers, payees, and audiences drastically (and not just be pitched differently), or it needs the industry to change underneath it. The latter option is not actually that unlikely at the moment.

I think advertising is the wrong model for Twitter.

Every ad I see makes Twitter maybe 5 cents? I'm guessing they earn $40 / year on me (I'm not a heavy uesr). I wish I could just pay them $40 and not have any ads inserted into my stream for the rest of the year.

I would pay 50$ / year to make it add-free. But the again the majority will jump elsewhere in no-time.

Or just use adblock?

Is there an adblocker that works with Twitter?

I use PiHole, doesn't seem to work with twitter.

Both the 5c/per ad and user-willingness-to-pay estimates are way optimistic. Ads you see probably has a CPM (cost per milleu, or thousand) of at $5 on the upper end and I'm guessing average around $1 CPM, which would be .5c and .1c respectively.

Facebook's per-user revenue in the US as of Q4 2015 was around $11/yr (source: http://www.businessinsider.com/facebook-average-revenue-per-...) although its grown by 50% yoy.

Chances are if FB / Twitter / Instagram had high confidence that could monetize their product with a subscription model averaging even $10/user a year I think they wouldn't hesitate to implement such a model.

Yeah, I tried to give Twitter the benefit of the doubt. It's kind of depressing to me that they are willing to make their product shittier to earn a fraction of a penny.

I think comparisons with Facebook are a big part of Twitter's problem. They aren't Facebook, never will be, and shouldn't try to be. If they use Facebook numbers as a benchmark, then they are totally screwed.

You are off by an order of magnitude. Assuming a $5 CPM, you are looking at half a cent per ad. And a $5 CPM is very high for user generated content, especially display. It's likely closer to a $1 CPM if not lower.

It's depressing to me that Twitter is willing to degrade my experience for a fraction of a penny. When I'm browsing from my pay-as-you-go phone (ie expensive data), I wouldn't be surprised if it costs me more to download and display the ad than Twitter earns. That seems very broken to me.

Personally I think celebrity endorsement style advertising is a good match for Twitter. They have all these celebrities with all these fans. On the way to work I think I heard the DJ hawk 2 or 3 different products. I think that's about the only model that doesn't feel forced. Find out what the people with 20million followers like and find out how much those companies are willing to pay for them to talk up the product. Give some endorsement kickback to the celebrity.

It's already happening without Twitter's involvement.

Right, it's hard to see how Twitter can get a cut for themselves as a middleman when it's so easy for someone to make a deal with a spokesperson directly. Unless they start artificially restricting the reach of posts, like Facebook has done. They have already made moves towards making user feeds at least partially algorithmically-generated.

There's a lot of advertisers who swear by it.

Are you measuring success purely based on last click ROI? Typically social networks don't do that well from a last click standpoint, so you need to look at them through a few different attribution models and path reports (such as those found in GA's attribution tools) to see what's really happening.

As almost everyone is using twitter now a days for some sort of customer support I am wondering why twitter isn't monetizing that aspect. Provide businesses better tools and applications to manage support and charge premium. Similar services can be offered to govts as well.

That was kind of a fad a few years back, but many companies have backed off from it.[1][2]

[1] https://consumerist.com/2012/12/06/charter-ends-twitter-and-... [2] http://time.com/3916355/social-media-customer-service/

I don't really see the point in Twitter. All of my friends and family are on Facebook, but I only know a few people that use Twitter.

I am sure it only gets as much media attention as it does because of the lazy journalism it allows - what's trending, Twitter's reaction, etc.

Different use cases, on Facebook you friend the people you know, on Twitter you follow the people you wish you knew.

Also, news (especially breaking news) and commentary from people who (mostly) know what they are talking about is only on Twitter.

My use case is opposite to yours for example, as most of what is posted on Facebook/Instagram is showing off to your friends and has little informational value.

OK, not many people "I wish I knew", but I get your idea. I can still follow "famous people" on Faceboook (though mine is limited to a couple of professional kayakers).

I agree that Facebook is generally full of crap, but when I look on twitter I don't see it being any better. The content seems worse due to the character limit.

Laziness is the engine of economic progress. People crave convenience.

Ads -> Ad block. Especially for Twitter audience.

I wonder how many people are ready to pay for special stuff or accounts on Twitter. Like a "Premium" account, or double highlights, or special sh*t.

But maybe, even if they exist, it is not enough to maintain a multi-billion dollar company.

What I like is that everyone has a solution on how twitter should run, but no twitter to run.

A whole cottage industry of services exists to improve a power twitter user's experience. The fact that Twitter does not have any significant piece of this pie is surprising.

Twitter should just have implemented Google Ads ten years ago. They would have made money from day 1. Google would have acquired them.

> Google would have acquired them.

And then perhaps shut them down...

Twitter is suited more for a ZeroNet-type platform.

And here we are, 17 years later, repeating the dotcom bubble :) Of course technology moved forward, now things like Twitter or LinkedIn or Badoo looks much nicer than some random online shop or Kittler owner's forum from original dotcom boom, but the principle still stands:

Lots and lots of people have been fooled into investing in companies that has nothing but a fancy website and ridiculous dream to "change the world". And no money in bank.

Put your life jackets on because Wall Street is headed towards another iceberg.

Twitter has 412 years of cash in the bank, assuming current burn levels, debt levels, and profitability.

http://www.usatoday.com/story/money/markets/2016/01/25/twitt...

I don't follow. I'm looking at Google Finance, and it says they have $4.3BN in assets and a net income of -521M. What am I getting wrong?

You misunderstood my point.

The problem isn't that Twitter will go bankrupt, because it might as well operate for those 412 years as you said, no problem here. But if it won't be making any profits then it's stock price can fall another 77 percent, or more.

Twitter's CEO and employees will be fine, but shareholders will loose patience (and money).

EDIT: I've just thought of the way Twitter should proceed with it's business - stop pretending it is a business in the first place.

Twitter should be officially converted to what it really is: charity organization with focus on freedom of speech. This would give them some tax benefits plus the possibility of raising money through donations.

It's all about target marketing. I remember some tweets I would make hundreds of dollars and on most of my tweets I was getting $5-$10 epc. The beauty of Twitter is the power of the warm leads in its search. If they can effectively monetize that, there could be light at the end of the tunnel!

People can make money from Tweeting? Really? Like YouTube creators? I had no idea.

There's a whole marketplace of influence out there, if you only start asking the right people. Want a cute but not overly bright reality TV star to tweet about your handbag company? There's a price for that. Looking instead for a popular recording artist to mention your viral video? Pricier, but very doable. Of course, Twitter doesn't get a share of this money.

Which is why they should charge for usage above X followers. You can't send unlimited emails to a 1mil person email list for free so why should you be able to do your marketing for free on twitter?

Neither is Amazon:

http://www.investopedia.com/stock-analysis/031414/amazon-nev...

Thats done on purpose. They have a choice in the matter, purposefully investing towards a future they can see.

Please stop spreading this. "Reinvesting enormous profits in yourself" breaks sharply from the common understanding of what "not making a profit" means, even if technically correct.

Half the accounting industry basically exists to document how much taxable profit you made "even when spending all the money that comes through".

"This" is an observation that Amazon makes no profit, and is obvious to everyone. What you're spreading is Amazon P.R. about how no profit is profit, and you have the burden of proof.

http://cepr.net/blogs/beat-the-press/jeff-bezos-amazon-and-t...

http://cepr.net/blogs/beat-the-press/franklin-foer-confuses-...

"Profits are independent of investment decisions, at least if a company is not engaged in accounting fraud."

Right or wrong, for good or worse, this author is being deliberately obtuse on this matter.

Amazon generates profits and re-uses them before they're on the books as profits. It's a tactical decision, and the letter of the accounting law doesn't contravene their strategic decision.

If you don't like it, don't buy their stock. They've been at this game for a very long time.. so, it's no surprise.

You're misinterpreting marketing as profit.

If they are practically giving away kindles or Amazon prime, that's a legitimate marketing cost, not profit spent tactically.

There's no guarantee their revenues will stay after they stop spending that money.

As someone ignorant of accounting law, it's not obvious to me why he's being obtuse, and just saying he is doesn't add anything to the conversation. In the other article, he goes on to say

"The people who say that this is due to the fact that they are investing in building up their business are showing their ignorance. Reinvesting and profits are two separate issues. Profits reflect the difference between revenues and costs on current business operations. These can all be used for investment in expansion (as opposed to being paid out as dividends and share buybacks), but they should still show up as profits. Amazon doesn't show profits or at least not much. This means that it costs them as much to run their business as they are getting from customers in revenue. That is not viable as a long-term model even if they are always expanding."

Both statements seem like reasonable statements to me (who is, again, ignorant of the law). Is he wrong? Could you expand on why he's wrong?

Money gets into the ecosystem by ads (which I have found not to deliver ROI) and paid influencers which have large follower counts. Paid Influencers are paid outside Twitter and that won't change. The solution is to charge a usage fee to people with a large follower count. If CocaCola is reaching 1 million+ people on the platform, or even Beyonce or Staw Wars kid, then I'm sure there is a value to those people to maintaining that audience. This implementation might not be the cleanest. Has anyone else seriously thought about ways they might actually make this into a business?

Nah, nobody has thought about how to monetize Twitter yet.

Large influencers are what attract people onto the platform in the first place, which is where ads and the like are supposed to take over. I remember when Oprah and Ashton Kutcher were battling to be the first to reach 1m followers, they bought billboards with their Twitter handles on them. The amount of new users that must have brought to the platform must have been tremendous, better than any other marketing efforts from Twitter at the time.

Twitter should be paying people with large follower counts, not the other way around. If they start charging for that, they'll just take their massive audiences elsewhere.

Where will they take them?

What was Twitter before?

Twitter is where it is today in very large part thanks to the big names that attracted new users. Wherever they choose to go then has the potential to grow in just the same way.

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