Twitter may receive formal bid, suitors said to include Salesforce and Google | Hacker News Reader

Twitter may receive formal bid, suitors said to include Salesforce and Google

cnbc.com

267 pointskgwgk344 comments

IMO, Twitter is the poster child for the tech bubble. They have users, which is their only claim to viability, but notably, they have never made a profit. Currently valued at around $10 billion with 350 million active users, that's about $29 per user. You'd be hard-pressed to find an investor so foolish that they would invest $29 in each of their users and hope to make it back if it were stated in those terms, but people have rushed to invest in a company which only has users, and whose attempts to monetize users through advertising have correlated strongly with loss of users. There can be little argument that Twitter's price has become entirely detached from its value.

That doesn't of course, mean you couldn't make money by investing in Twitter. You can make money by investing in overvalued companies as long as you don't hold onto your share until it busts. One profitable route would be if Twitter does get bought by a larger company. The market as a whole will lose on Twitter, but local maxima can be more profitable than the whole.

But at a personal level, don't be naive about this. A lot of people are investing, not just money, but time and energy, in Twitter or startups like Twitter. If you find yourself thinking that Twitter is a company with any real value, you should take a step back and evaluate whether you're being wise, or whether you've fallen prey to the unbridled optimism of the tech bubble. Twitter's position as poster child for the tech bubble makes it a good litmus test for people's understanding of the industry, and I suspect it will correlate very strongly with who loses everything when the tech bubble collapses.

Your comment actually sort of explains the question I asked. Would you still maintain this view if either

a) advertisers reduce their spend on FB because of poor results and the usual problem with saturation of any advertising channel and start looking at other options, or

b) more events play out in the future where Twitter's place as the "other social network that people actually care about" becomes more important/relevant - e.g. one more mass hysteria event surrounding some censorship from FB, or

c) anything happens to block FB from being able to show ads inside WhatsApp?

In the long run, I don't think that Twitter's problem is one of competition from FB or any other competitor. They have enough users that they could turn a profit even if they could monetize those users, regardless of competition. But they haven't turned a profit, which after 10 years is a strong indicator that they can't turn a profit.

If Twitter is able to time an addition of ads with a major event that damages FB's user base, the influx of users from FB might cancel out the loss of users from the addition of ads, and Twitter might be able to turn a profit. But that effect is a) temporary, and b) fairly unlikely. Even if they managed to eat into their competitors' user bases, they have failed to monetize their existing hundreds of millions of users, so there's no reason to believe they'd be able to monetize future hypothetical users.

> They have enough users that they could turn a profit even if they could monetize those users, regardless of competition.

That's an excellent point. I started this discussion wondering "Is the company in such bad shape that it needs to find a buyer?" and I think you might have just convinced me that it needs at least some kind of joint venture , if not be bought outright.

Hope Twitter doesn't go the way of MySpace.

> But they haven't turned a profit, which after 10 years is a strong indicator that they can't turn a profit.

In those 10 years Twitter has changed leaderships multiple times. Twitter has never had stable and competent management.

That's symptomatic of the problem, not causal. Despite leadership changes, Twitter has build a solid infrastructure, raised money, etc.--all the things that would make them a profit if their business model were at all profitable. Leadership keeps changing because nobody knows how to make it profitable, and we've tried enough approaches now that I think we can conclude it won't be profitable.

Whenever people discuss Twitter's finances I wonder what they'd look like if there was a paid tier. Just a few bucks a year to mark your account as Supportin' Twitter. Without necessarily having any other perks. Except maybe "not having any fucking ads". I'd probably do it; I was a paid user of Livejournal for many years when it was Where All My Friends Were.

But no. It's always "monetize by becoming another goddamn channel to advertise to people through".

I agree with the "not have any ads which follow you around the internet" as an appeal for the more privacy conscious folks which is probably an idea which is going to get more traction in the coming days...

Even better, actively mock Facebook/Google's privacy track record (while peddling the paid Twitter accounts) like the way Apple did to Microsoft. If you are going down anyway, why not go out with a resounding bang? :-) But you will burn all your bridges. Very few folks have the kind of chutzpah that Steve Jobs had.

> advertisers reduce their spend on FB because of poor results

The problem I see is that FaceBook's news feed is a driver of traffic to other websites, as people click those links, whereas Twitter doesn't seem to drive much traffic. I know sites that get 40% of their traffic from m.facebook, and another 30% from www.facebook.com month in, month out. I don't know many (if any?) sites where Twitter is ONE OF the major source of traffic, let alone THE major source of traffic.

That makes Twitter's product far less advertiser useful than even companies like Outbrain and Taboola.

I just think the way things have panned out, it is a source of interesting comments, but not really a place to find interesting stuff. Both FaceBook and Google are the roads that lead to destinations, whereas Twitter is the destination. Sadly, for an advertising play, being the road is more profitable.

People always write them off, but I do wonder if it's more of an emotional write off or the fact that as non twitter users, they refuse to see value because they personally don't see value. I'm not a twitter user or advocate but:

106.31M

316.93M

664.89M

1.4B

2.22B

That's their revenue over the past 5 years. Their R&D cost last year was over 800M.

I'm not saying they are Google, I'm not saying they are LinkedIn, but there is definitely big money at play here at a scale investors love (hundreds of millions of users, over 300M at last check) so it might be premature to completely dismiss them.

Yes, I think a large part of the hate that Twitter gets is from people who see Twitter as a silly product, like Snapchat or something.

Yes, Twitter has challenges in monetizing, and yes, Twitter is weird, and yes, Twitter hasn't made a profit yet. But fundamentally, Twitter is still the preferred platform for following media, celebrities, politicians, internet-famous-people, and quick ad-hoc public communication with those people. And just like how Facebook's success is that all your friends are there, Twitter's success is that every public figure you're interested in is there, even the geeky small nuts-and-bolts types like writers and programmers and artists.

It has become the public plaza of the Internet.

If I want to post pictures of my kids, I'll do it on Facebook. If I want to pick a fight with my city councillor about a decision he made or get in touch with a script-writer of my favourite movie, I'll do it on Twitter.

Hell. Most of tech-support is through Twitter. My tweet carries a large amount of power compared to a phone-call to tech-support.

Yup. Twitter carries the implicit threat of "satisfy me or I'll make a public stink". It's the closest we non-journos can do to putting a mic in their face and demanding answers on camera.

You make a great point, Twitter's revenue has been growing for the last five years. The market cap of Twitter is supposed to reflect its future value and this is where things get complicated. With a no longer growing user base, limited additional real estate to show ads, strong 3rd party ecosystem which doesn't display ads, they're in a much tougher position than they were 3 years ago.

The only reason revenue, users, scale, investor love, patents, staff, infrastructure, etc. matter is that they usually are indicators of potential for profit. Profit is the entire point of investing in a company.

But the greater indicator of potential for profit here is that Twitter has existed for 10 years and has never turned a profit.

Given this, I think that revenue, users, scale, investor love, patents, staff, infrastructure, etc. have all become disconnected from Twitter's actual profit potential. They haven't made a profit, they aren't going to make a profit. I think that the only logical choice is to dismiss the idea that Twitter has value.

But, as I noted, perceived value can be as profitable as real value for an investor. Just don't be naive and mistake the perceived value for real value--naivety will lose you money.

Twitter has existed for 10 years, as you say. How many 10 year old companies have 300mm users and revenue at $2.2 billion and growing at this pace?

This is the wrong question to ask if you're investing, and I've already explained in the parent comment why this is the wrong question to be asking. Usually these things are indicators of profit potential, but they aren't in Twitter's case.

I think Salesforce have never had profit. Neither Youtube for Google. The problem with twitter is that people do not believe they could make big money alone and for a long time without be destroyed for someone else in a garage. They still see a company that needs a cash cow that could financial the cost of innovation.

There is no way Twitter couldn't turn a profit on $2B in revenue. But that's not their focus at the moment. Instead they really want to grow the revenue numbers even higher, worrying about the profit later. However they may not be able to increase revenue much higher, and investors aren't really interested in a profitable but stagnant Twitter. But if they wanted a profit they certainly could, starting by right sizing the company rather than pouring hundreds of millions of dollars into R&D that is barely moving the needle.

Are you saying that they will attain profitability at some point?

Why wouldn't they? It would seem like they could downsize below $2 billion in costs, no?

> If you find yourself thinking that Twitter is a company with any real value

What about non-monetary value like playing a key role in 'Arab Spring'[1]

https://en.wikipedia.org/wiki/Social_media_and_the_Arab_Spri...

Sure, then they should be a non profit and be funded as such.

If they showed a single ad to anyone during that, then they lose the moral high ground.

Given Twitter's complicity in freedom-of-speech curtailing activities in the US, France, Israel, and Turkey, Twitter's non-monetary value only goes as far as that non-monetary value provides them monetary value. I don't think this is worth considering from either an investment or ethical perspective. Twitter, like most corporations, is an amoral entity.

Why would anyone pay $10B for non-monetary value?

Because they think they can turn non-monetary value into $.

Because mind-share is sometimes more important than mere $. I'm not necessarily implying that buying Twitter for $10B is a good deal, but I can see why some market players would pay that money.

Twitter has its light side (Arab Spring) and dark side because Twitter is also number one platform on which spreading terrorism happen and for terrorist recruiting.

Twitter is also pretty heavy-handed on its censorship of US politics. For instance by blacklisting trending topics such as #WhichHillary when it had gained momentum. (when the protester went to her event with the quote about 'super predators' + #WhichHillary on a banner)

You mean the same Arab Spring that sparked 4 or 5 civil wars (depending how you count), led to the rise of IS, and in the civil wars aftermaths caused more civil wars in neighbor countries that were invaded by foreign guerrilla fighters?

When I made some napkin calculations some time ago, Arab Spring and its fallout so far killed about 300.000 people and displaced millions. Is the positive non monetary value enough to compensate that much deaths and destruction?

Sorry but I call bullshit on saying that "the arab spring" is the cause of ISIS and the syrian war.

The sectarian corrupt violent syrian state and the U.S. invasion of Irak are much better suspects

The Arab Spring revolution became the Syrian Civil War, which became IS. Don't take away the agency of people in other countries to be evil, just because you believe the US is.

> The Arab Spring revolution became the Syrian Civil War, which became IS.

No, the Islamic State in Iraq, which arose in Iraq before the Arab Spring, became the Islamic State in Iraq and the Levant (and later simply the Islamic State) after sending offshoots to fight in the Syrian Civil War, and then reintegrating those offshoots. But it is a mistake to say that the Syrian Civil War "became" IS; before the Arab Spring and Syrian Civil War, the Islamic State in Iraq was already a substantial armed force holding territory and heavy weapons, most of which were taken from the Iraqi military, which it became as it grew up fueled largely by resistance to the US occupation (and, for a while, its temporary attachment to the al-Qaeda brand as "al-Qaeda in Iraq", which was useful when al-Qaeda was the most visible brand in Islamist opposition to the U.S., though eventually they outgrew the need to be a franchise of a foreign brand.)

>Sorry but I call bullshit on saying that "the arab spring" is the cause of ISIS and the syrian war.

do you see a lot of difference between Iran's revolution and Arab Spring?

>The sectarian corrupt violent syrian state and the U.S. invasion of Irak are much better suspects

Granted similar elements - a major group of population dissatisfied with the governing power as well as US hand cooperating with the side/power opposing to that group - were present in Iran too. One can see how religious extremists hijack that dissatisfaction and use US' involvement to fuel it. So the US' involvement is a catalyst, not the root cause.

> You mean the same Arab Spring that sparked 4 or 5 civil wars (depending how you count), led to the rise of IS

The rise of the group now called the Islamic State as an armed force controlling substantial territory started well before the Arab Spring, and is a pretty direct result of the US invasion and occupation of Iraq, and particular policy choices made during that occupation.

Admittedly, then it was just called the "Islamic State in Iraq". If you want to blame the Arab Spring for contributing the situation in which occasioned its next two name changes and its expansion into Syria, sure, but if it hadn't felt secure enough in Iraq to form separate groups to go fight in Syria rather than worrying about holding on to its (at the time) core territory, it couldn't have exploited that opportunity.

And that was started by a rise in grain prices thanks to crap harvests.

If anything, Facebook and Twitter kept a lid on things. Only when the governments cut the national net connections did things really hit the fan.

This likely because now people had to actually go out and talk to their neighbors to figure out what was happening, and thus were more easily pulled along.

The first two sentences of your link: "The role played by social media during the Arab Spring as a revolutionary wave of demonstrations and protests (both non-violent and violent), riots, and civil wars in the Arab world represents a highly controversial issue. The impact of social media on the events in the Middle East and North Africa as a factor of political uprising and turmoil is highly debatable and fostered both criticism and approval."

Arab spring might have had CIA interventions. But twitter surely played a big role in making Urban India vote for Mr. Modi throwing a corrupt government out pretty badly.

Personally it was Twitter that educated me about some of the horrendous laws that the Indian government passes/planning to passed.

Because it's bullshit PR by Twitter.

I wouldn't be too quick to cast a positive on Arab Spring. Most of those countries have yet to recover and it is arguable that it was a precursor to the current migrant crisis.

I would agree that the democratic organizing power of twitter is impressive.

> They have users, which is their only claim to viability, but notably, they have never made a profit.

I am SO glad that someone else realizes this. Many journalists, and lots of regular people subsequently, mistake revenue for profit.

Not sure why I am being downvoted. Is Webster's Dictionary too offensive to some?

at $29 per user, wouldn't it be better to spend $1 Billion creating a replacement for twitter and then giving each new user a dollar or something?

So that they can take the dollar and go back to twitter to tweet "how the new company is making a fool of itself?" :)

Bing tried this - they offered users cash for searching on Bing and buying things.

What resulted is that everybody searched on Google to find the thing they were interested in, then searched for that specific item on Bing, collected the cash, and quickly went back to Google. You don't change habits with a dollar or even $29, and consumer habits are immensely valuable.

Agreed on poor finances. But Twitter has one thing that no one else has - they are in the center of the zeitgeist. Every political candidate is on Twitter. Every news network discusses Twitter happenings everyday. NFL broadcasts list players' Twitter handles. Half the commercials on TV advertise hashtags. South Park just did a whole episode about Twitter. The cost to embed your brand in the minds of Americans like that would be far greater than $10B. The question is can some larger company capitalize on that mindshare.

There are plenty of people who use Facebook and don't use Twitter. Facebook is certainly more ubiquitous, it's just not quite as easy to tell you where someone's FB page is the way you can just have "@BarackObama" in the ticker.

A (somewhat less significant) number of people use Twitter and not Facebook.

Facebook seems to have a reputation of being more ubiquitous, yet creepier than Twitter.

It's a lot more than "somewhat" less significant.

Oddball idea: If all these news outlets, and other organizations, benefit from it, maybe they could finance it. The same way the Linux Foundation is sponsored by large tech companies.

No shit! They should charge companies and news agencies, and anyone representing companies per tweet(1k per tweet or similar). They provide a valuable service - why should they give it to corporations for free?

fb doesn't do that. Twitter can follow what fb does. Right now twitter is very light weight, un-cluttered. It can change UI/UX to advertise more. Of-course there has to be value for advertisers as well - which I think is there (350M users).

Yeah. Twitter is a broadcasting platform. It is different from FB. FB feed has your mom and their friends' posts. Twitter doesn't, unless you explicitly ask for it. Not everything should be about advertising. Twitter can stay as it has, and just charge people with money, money.

The feeds of both are whatever the algo thinks - which will be some compromise between what you want and what the owner of the algo wants.

What is algorithm-driven in my twitter feed? The 'While you were away' stuff at the top? Other than that, as far as I know it's always been a chronological feed of whoever I want.

Are you sure? http://fortune.com/2016/03/20/twitter-algorithm-social-marke...

If you don't even notice it, the algo has got you...

Oh, wow. Does this effect third-party clients as well? I use Echofon almost exclusively.

I can't imagine not - would Twitter give people an easy way to avoid sponsored content etc? That's one reason they cut off all the devs.

Wow, didn't know that either. But I don't "follow" people. Rather, I simply add them to different lists (finance, news, science, tech, right, left, etc.) and use tweetdeck to follow the multiple lists.

I wonder if they're also messing with the lists... In any case, as far as I can tell, I seem to be getting all the tweets of people in the list in chronological order.

that's a good point too, I have a couple lists I look at for close friends and such and only go onto the timeline every now and then

The tweet is the advertisement. Keep everything as it is today, but if you have 1mm+ reach per tweet, you pay $$$/tweet.

Twitter's basic problem is that they opened up to third party clients back while they were still growing, and those third party clients quickly outpaced them in new usage features.

Twitter has been trying to reign that in since (various things their official client can do is not accessible via the public APIs), but they can't just drop their third party support or they would see the usage rates dwindle in no time flat.

This is a model that Line has taken, and had some success with (particular in parts of Asia and Europe).

I can't imagine politicians funding Twitter.

It's true, the money only ever goes in.

I most definitely saw a Trump ad in my twitter feed.

I marked it as offensive ;)

Outside of Bloomberg, most news organizations are struggling. They couldn't foot the bill at ten billion.

Um.. This is exactly what advertising is.

Twitter just has a terrible advertising platform. FB is making huge amounts on what should be basically the same product.

Not necessarily. They could pay for the platform to be around just so that people are there to banter and generate content for the news programs.

The two platforms are completely different. The users of FB (and LinkedIn) put their real information on the website, allowing advertisers to target effectively which raises the average ad value on the website. Intuitively, revenue = ad value * # impressions.

Twitter is in between anonymous forums (unfortunately they all died) and FB/LinkedIn in terms of ability of advertisers to target users. They're living off of high impressions, and they've basically already saturated the market. Now they need to somehow raise ad value, which would mean integrating hundreds of free, quality services to gather data like Google or tying Twitter accounts to real identities (like the Google+ attempt)

Different yes but it's not that hard to look at the people you follow, the content you consume and generate what Twitter called the "taste graph". I'm not privy to what the issues are but I feel Twitter should/could've had a lot more success in terms of ads

Yes, the anonymous accounts are a problem - but mostly because of the trolling, not the lack of identity. Snapchat and Instagram both have anonymous accounts and don't have a problem.

Yet Twitter has people like Kim Kardashian selling tweets for $200K/tweet[1] (so there's your measurement of ad-value), and yet Twitter can't make money.

Meanwhile, people are moving to Snapchat stories which is exactly the product Twitter should have built. Twitter, on the other-hand make the ground breaking decision to not include URLs in the 140 char tweet count.

Twitter can't ship new product.

[1] http://haveuheard.net/2015/08/kim-kardashian-how-much-money-...

The way that Twitter has become so pervasive despite not really solving the profitability problem makes me think of how a lot of the original constructors of skyscrapers end up building icons and then losing their shirts and being forced to sell it to someone who ultimately sees it realize the initial promise.

> The cost to embed your brand in the minds of Americans like that would be far greater than $10B.

Just because something costs money doesn't mean it's valuable. Being at the center of the zeitgeist definitely seems like it would be profitable, but de facto it hasn't been for 10 years, so it probably just isn't.

Being in the center of the zeitgeist isn't a substitute for making a profit.

And yet they still can't make money. They aren't growing either.

This. Also, not only does Twitter have great brand recognition but also individual tweets can have far greater reach than Twitter's user numbers might suggest. A lot of non-users see Tweets - embedded in news stories, shared around the internet, or shown on TV. And lots of non-users hear about things that happen on Twitter.

That said, while that brand recognition and reach is scarce and hard to reproduce, it's not necessarily something anyone would want to pay a lot of money for. How would anyone monetize it? Twitter can't really control how many non-users see a tweet.

Maybe popular tweets inline with and advertisers brand could be sponsored; "@jonwhoever from Colorado tweets 'I have never had such a popular tweet about the mobile phone industry' brought to you by blackberry".

I'm only slightly not serious about this :-)

Problem #1: 90% of Twitter is shit [1]

Problem #2: It's expensive to support millions of users who post shit

Problem #3: Twitter's revenue base is too small for its cost base

Solution: Eliminate advertising and charge $20 per 1000 tweets. Free to read, costs a tiny bit to tweet.

People who post shit will disappear. People who have an audience and something to say won't bat an eye at this low cost.

If this weeds out 80% of the shit while keeping 80% of the good stuff, Twitter will simultaneously shrink their costs while growing revenues to become a sustainable business.

With this model, Twitter is a $1 billion per year profitable business [2] with a much higher signal-to-noise ratio. [3]

Improve the signal-to-noise ratio and Twitter becomes THE place to be for all kinds of communities. That means a return to growth and higher rates per 1000 tweets.

[1] https://en.wikipedia.org/wiki/Sturgeon%27s_law

[2] Start with 200 billion tweets per year. 90% are shit, and 80% of these go away, leaving 36 billion shitty tweets. 10% are good, and 80% of these stay, leaving 16 billion good tweets. 52 billion tweets in total, monetized at $20 per thousand is a billion bucks a year.

[3] Signal-to-noise ratio before is 1:9, after it's 1:2.

Disagree, I don't follow people who "post shit", I follow a few hundred people in the tech space (developers, devops, VCs, CTOs etc..) that I think are interesting (and dont post shit) and thus my twitter feed has very little overall shit. You curate your own feed based on who you follow, if you don't want to listen to whiney SJWs, or people twisting every word of Hillary or Trump then don't follow them (or unfollow them)..

You may not agree with this comment but it's intelligent and well argued. Seriously stop down voting on knee-jerk bullshit reactions.

If you disagree and feel strong enough about it to do that, post a comment like nowprovision did.

Introducing mandatory charges for tweeting will probably hurt their user base and they'll lose some value. But they could always make a combined approach, having first 5 to X tweets per month for free.

> Problem #2: It's expensive to support millions of users who post shit

Is it? I always assumed all their money was plowed into moonshot development to try to find something, ANYTHING to make a billion dollar company (stuff they throw away within 12 months, like Twitter #Music)

Just supporting their core functionality could be done with a fraction of the workforce, and could probably be profitable (although it would never satisfy the investor valuation)

This is beautiful.

You could add a "tip jar" to allow followers to support someone by buying Tweets for them, so that high-signal accounts would seldom have to pay that fee.

Interesting idea. Would you charge the same amount in poorer countries? Twitter's multicultural/multilingual user base is such a good thing.

and people like Elon Musk and Tim Cook are on Twitter. It's incredibly interesting to read what they do and say day-to-day. I'd call myself a passive user because I only read notification on my phone if few of these people tweet something.

Harambe's at the center of the zeitgeist. You wouldn't invest in Harambe.

You could say all the same things about AOL and AOL Keywords 18 years ago...

You really couldn't. Yes, people who were online recognized AOL keywords the way they do URLs today, but it never had the pervasiveness that Twitter does. News channels show tweets and hashtags. A large fraction of news shows up on Twitter before it hits other sources of news. It's the platform for putting up a smoke signal, a firsthand account, or a story as it develops.

(None of which inherently makes it profitable.)

Be careful conflating "never made a profit" with not having a business. They made $710M in revenue last quarter, up 48% yoy. Their expenses might be high, but they can address that. Companies like Amazon didn't make a profit for years, and are rightfully quite valuable in the eyes of the market.

A $29 valuation per MAU is low if anything. Facebook is almost 10x that (and deserves to be). Early stage startups often get 50x that or higher.

> Be careful conflating "never made a profit" with not having a business.

At 10 years in, this isn't a conflation--these are just equivalent.

> Early stage startups often get 50x that or higher.

...and this makes sense for some early-stage startups. But Twitter isn't an early-stage startup.

Why the hell is their expense that high? 350 million users, sure it's a lot. Plus they have to store the messages for a long time and it's not like a text message but more like a group chat. Still, most of their expense can't be going towards their tech stack but headcount. Anyone that takes over the company is going to be doing massive layoffs. They should do it their self and become profitable or else someone is going to do it and run of their good folks in the process. They are about to become the new Yahoo if they don't turn themselves around quickly.

> Anyone that takes over the company is going to be doing massive layoffs.

Rapidly-growing tech behemoths like Google can afford to acquihire hundred of engineers and, eventually, assign them to other work.

Maybe. But at the same time, with over 3,000 employees and a small set of products, that's not only a lot to take on but much of which is likely redundant. With so many surely they hold a fair amount of under performers as well.

What other work? Is there a company out there that actually has 3,000 employees-worth of work to get done, but nobody to do it? I thought we were in general facing the opposite problem: Lots of bodies but not enough work, leading to under-employment.

It depends how fussy employers are about their employees. Employers are always saying there is a talent shortage.

You would think that, but honestly the site is broken more often than not for me. Right this very moment all pic.twitter links are just redirecting to "https//" URLs.

And that's in an incognito tab.

One of the best ways to resolve issues in a project is simplifying. You don't need so many if you are going to simplify. Though, anecdotally, I haven't had any issues with the site or service for a few years now. So I can't imagine they have many production issues that affect all the users.

I haven't done a formal study but their t.co url shortener (which is forced on anyone who posts any url) is often broken or extremely slow. Twitter seems like a company where hardcore systems engineers probably take a backseat to "visionary product managers"

Many of those employees will be on the ad platform. Google already has a good ad platform...

>Why the hell is their expense that high? 350 million users, sure it's a lot. Plus they have to store the messages for a long time and it's not like a text message but more like a group chat. Still, most of their expense can't be going towards their tech stack but headcount.

yep. I don't think the difference between WhatsApp and Twitter in features explain such a difference in headcount and expenses.

Every time I've looked at their reports, stock-based compensation is significantly greater than the total net loss. It seems like the classic tech bubble company where there's a solid large company which is at risk because they're spending like a profitable huge company.

Getting rid of half their staff probably wouldn't hurt. In fact, they might finally be able to turn a profit.

Not all users are equal. A newsmaker, world leader, reporter, gatekeeper is worth MUCH more than $29.

How about bots? Isn't there number of users tainted by bots? I figure theit value is near $0.

Can we agree as a community to stop comparing every company that is losing money year after year to Amazon.

Amazon was pouring money into infrastructure while growing a massive retail business.

Worlds different than some company that's trying to figure out how to sell ads better.

> whose attempts to monetize users through advertising have correlated strongly with loss of users.

I don't know if that's true, or how strong the correlation is, but if it's there and you as a founder can detect it before others, that's a good sign you should sell the company rather than stay independent.

Agreed.

Personally, I have found the ads on Twitter to be the most relevant. (Google search is too. However, I prefer organic results while searching and I scroll through to the results almost always.)

Yup. On twitter I see ads for tech and movies - that fits my tastes. On fb I see ads for sleaze.

How many of these 350 million users are trolls and sock puppets? I know I have at least a half dozen Twitter accounts myself.

Hell, are they even active users? I know I probably signed up for twitter long ago when it started, maybe tweeted once or twice, and never used it again, finding it useless. Do their "user counts" count me?

> 350 million active users, that's about $29 per user

Name one other platform which has Obama, Trump, Hillary, Beiber, JK Rowling, Pope, United Airlines, Marc Anderseen, Borrat, Bozo the Clown all engaging in two way communication with their fans and haters ?

I think an investor should worry less about $29 per user metric and worry more about the incompetence of the top management which has failed to generate revenue out of this.

> Obama, Trump, Hillary, Beiber, JK Rowling, Pope, United Airlines, Marc Anderseen, Borrat, Bozo the Clown

With the likely exception of Andreesen, all you're getting are particularly fragmented and discombobulated press releases from 'their people' (in house or consultant PRs).

I could live without them.

I live without Twitter perfectly. But most people care.

$29 per human user or per account? There's a big difference here.

$29 per human is a steal, however if 9/10 accounts are bots, spammers, or dead, that's $290 per human which is a total ripoff.

The number I cited was their claimed active users.

I'm not sure why you consider $29 per human user a steal. There are two sides to a transaction--what you pay and what you get for it. What exactly do you think investors are getting for their money here?

Just compared to other industry metrics.

So you pulled it out of thin air?

No. Look at the citations others have made within this thread. A rule of thumb is generally anywhere from $50 to $200 per head for social network type applications. See also: Facebook, MySpace, Instagram, etc.

That's exactly why we're in a bubble. "Because other people are paying even more" is a really bad reason to pay too much for something. But that's the entire basis of Twitter's price--it's people investing in Twitter because other people are investing in Twitter (and other such companies) with no concern for whether that investment will ever return a profit.

Sure, but they are also growing incredibly fast at ~50% yoy with over $2 billion in revenue. I think that they have a fantastic revenue generating capability which justifies the valuation.

Their annual revenue is about $6 per user [1]. The problem isn't absolute failure to monetize, it's massive costs. If you thought you could run twitter without their ~4000 employees, you might have a chance of pulling some cash out of there.

The problem is, it's hard to simultaneously clamp down on costs and push for growth. In SV, anything other than growth is an admission of failure. If you aren't flinging money into R&D, everyone will assume it's the start of a downward spiral.

[That, and you can't buy twitter without outbidding all the True Believers]

[1] http://www.viewproxy.com/twitter/2016/2/annualreport2015.pdf

Have an up-vote. That's the big problem isn't it? It's no longer acceptable to simply get control of costs, make the ink black instead of red, and milk your product for a nice steady profit--then, once that happens, figure out if it's appropriate to grow from there.

They have invested in their tech team which is both infrastructure and expense. How much of the ~$10 billion it's worth is up for debate, but zeroing it's value is absurd.

$29 per user doesn't seem that out of line from other companies I've worked for. Of course it totally depends on the business but it comes down to the expected revenue each of those users will generate.

> poster child for the tech bubble

I don't think that they are that overvalued. To me, better examples are companies that get very high valuations in a short time that aren't justified. Twitter has had significant sustained usage and has monetized somewhat effectively.

> ...and has monetized somewhat effectively.

Disagree. They got a massive valuation quickly, never made a profit, and have lost much of that value because of it.

"Twitter has lost $2 billion since in 2011." http://money.cnn.com/2016/03/21/technology/twitter-10th-anni...

One man's garbage is another man's gold. I believe that the suitors will be able to make more value of the data from Twitter, than Twitter could by itself.

Google acquiring Twitter is actually the best end result here. Salesforce is probably the worst. Lots of people hate the idea of a Google acquisition, but I think it's well suited because:

- Google learnt from its mistakes with Google+ and is eager to not repeat them

- The company is a very different one now from years ago

- Google doesn't want to mess up identity again, so that wouldn't be an issue

- Google mostly just wants a social graph

- Twitter is a bad public company that makes irrational decisions

- Merging Google engineering/leadership with Twitter might actually give direction and ease the financial pressure that seems to drive the company's poor engineering decisions

Google learned from Google+? Where is the evidence?

Also, Twitter is unprofitable, but my understanding was that they were heavily trusted by the public.

There's copious evidence that's public, look for how it's talked about externally.

I think you're substituting a particular group of Twitter users for the public - the general perception is Twitter is full of hateful trolls and management can't be bothered to control them.

I would have said that the de-integration of Google+ from YouTube was a good example of them learning from their mistakes, except fucking Allo shows that they're still rather clueless about a lot of things related to people communicating online.

I still get prompted to "upgrade" to Google+ every time I launch a game on my phone.

I actually just don't see much news about twitter. I see a ton of quotes from twitter, though. It is still far more reliable for news like things than facebook.

Curious if you have any particular stories in mind.

> the general perception is Twitter is full of hateful trolls and management can't be bothered to control them.

Do you have some respectable polling data to support this claim? I also visit some of the biased websites that constantly beat that drum, but that doesn't mean this opinion is held by the general public.

I don't use Twitter much[1], but I see the opposite. They selectively censor to push their type of politics. They hide trending tags they don't like. I don't trust them at all.

It'd be great if Google bought them for one reason: see what they do with the censorship part. Will they continue picking off tags they don't like and open up the idea that Google is deliberately biasing things? Or will Twitter users suddenly see popular trends they never saw before?

1: The website is hostile to consuming content. If you scroll down a few pages of tweets then click an image or something, you lose your spot. Pressing back brings you to the bottom of the first "page" of tweets, not however far you had scrolled. Add in the slowness and wow, it's really quite a bad experience.

Trying to acquire a social network with flat or declining user growth while competitors continue to grow is certainly a sign that perhaps the wrong lessons were learned.

Frankly, I think there are some "lessons learned" that are critical and are relevant, but looking backwards only accurately tells you how to successfully create something in the past.

I agree that Twitter is in decline, but I think that is because of poor leadership and management at the company. Google might reasonably believe that they can turn that around.

> Google learnt from its mistakes with Google+ and is eager to not repeat them

Google has learned nothing from their mistakes.

As evidence their real name policy is still active. Contrast with Twitter where a lot of users have fake names. And yes, you can find hateful users on Twitter and I know of some folks that have been harassed, but the community I'm active in is very professional and civilized and the conversations have a much higher quality than what I've seen on Google+ or YouTube, even with their real names. Guess some people are assholes no matter what.

Also the Google+ API is still read-only. Which means you can only use Google's official tools for posting content. There's no way for example to cross-post on both Twitter and Google+. Apps like TweetDeck aren't possible for Google+.

Oh and Google Reader is still dead.

> Google doesn't want to mess up identity again, so that wouldn't be an issue

I'm sure they don't want to mess it up, but given that they are continuously messing up identity, I'm also sure that it will be an issue.

> Also the Google+ API is still read-only. Which means you can only use Google's official tools for posting content. There's no way for example to cross-post on both Twitter and Google+. Apps like TweetDeck aren't possible for Google+.

Is this true? Buffer allows you to cross-post to Facebook, Twitter and Google+.

I don't know what Buffer is, but if they can post to Google+ it only means they have a private deal with Google.

The Google+ API is read-only, it says so in their own docs: https://developers.google.com/+/web/api/rest/

And if you want a service that has integration with everything except for Google+, there's IFTTT.

Correct me if I'm wrong but I think buffer can also post to Instagram

It could be doing the reverse of scraping no? Faking app requests

Google+ has a significantly more powerful API for its trusted partners, such as Hootsuite. And maybe Buffer, unless they are doing some headless browsing hacks. Their public API is read only for strategic reasons. Unless you have a clear business case or plan on how to monetize APIs, opening them up can actually backfire very easily. The biggest example of this is Twitter itself, which has been trying to lock down its APIs since they are basically losing both money and direct access to users through them. But closing them now is causing further hurt, on user trust and goodwill.

> As evidence their real name policy is still active. Contrast with Twitter where a lot of users have fake names.

Now contrast Twitter's earnings per share with Facebook's, which does have a real name policy. This policy is 1 percent about harassment, and 99 percent about building an advertising market to sustain the thing once built.

Same logic applies to the read-only APIs. Unless you know a way to embed ads into the APIs, apps like Tweetdeck directly reduce income. This is why Twitter tried to lock down and revoke API access.

If anyone has been making mistakes here, it's been Twitter, who is now in such a poor financial position that, despite laying off a huge number of engineers, their best hope of avoiding Google Reader's fate is to be acquired.

Facebook's revenue has nothing to do with their real names policy. Unless you use those real names to tie them to a bank account or some other database, their value is zero. And I don't think Facebook is doing it, or sharing those names with advertisers, because they have other much more valuable signals and ads platforms in general don't actually want to share their data with advertisers, because that's their secret sauce, preferring to do the targeting by themselves.

I've worked on an advertising platform. This idea that those real names have value is basically a myth.

And speaking of Twitter's API, trying to revoke access is one of those decisions that irrevocably hurt them. The big reason for why Facebook succeeded while Google+ miserably failed is that Facebook is a platform.

>Google has learned nothing from their mistakes. As evidence their real name policy is still active.

No it's not. There's no requirement to use your real name in Google+ or YouTube. And if you don't like Google+ you can even delete it from your account.

>Also the Google+ API is still read-only. Which means you can only use Google's official tools for posting content.

So what? There's a good reason it's read only and that's to avoid the flood of spam that would flow in.

>Oh and Google Reader is still dead.

Yeah, like you ever used Google Reader. It was a seldomly used service that has now become the poster child for people looking to criticize all Google product announcements.

> As evidence their real name policy is still active.

The real name policy was revoked a couple of years ago. [1] I can only find some help pages on how often one can change the name and what to do if one wants to use a "first name" alone (the answer is to use a "." in the last name field and it won't be shown anywhere). Where does Google or Google+ require real names and since when? Do you have links to a re-reversal of that policy? I searched again, but couldn't find any.

[1]: https://plus.google.com/+googleplus/posts/V5XkYQYYJqy

Given what they've done with YouTube in the last few years or so, it doesn't seem quite like they've learned from their mistakes. I'm already seeing jokes about YouTube 'advertiser friendly' guidelines and 'YouTube Heroes' as we speak.

Really, the one thing that keeps YouTube going is how expensive it is to compete with it. Twitter doesn't exactly have that luxury.

Youtube comments changes were the last dying breath of the Real Names policy. As of ~2015, it's been dead as a parrot.

> Twitter doesn't exactly have that luxury.

Twitter's luxury is its existing userbase. Same for eBay, Paypal, and other near-monopolies.

Twitter's software is absolutely nothing special. You could have 95% of the core functionality in two weeks as a solo project. (Granted, it probably won't scale to 320m users right out of the gate ...)

The problem is that nobody's going to go and use your new Twitter-like service that has zero users. So if I built a Twitter clone, I'd probably get, at best, 100 very inactive users, no matter how great the service was.

I think FB acquiring Twitter is actually the best end result. Facebook has patience knows how to give independence and allow for the product to evolve. Instagram and WhatsApp are the best examples.

Those were growing when they were acquired. Twitter is stagnant at best and probably in the decline. Why would Zuck even bother with Twitter, he's clearly won this battle.

Google on the other hand has demonstrated that they have no idea how to compete in social. Buying Twitter gives them a property to play with at a discount.

Aren't self driving cars the next big thing anyway? Who cares what's on Twitter when you can sell ads in the car while I go from point a to point b.

Zuck offered Twitter a lot back in the day, Twitter leadership at time severely disagreed w/ Mark's vision of the merge. Particularly how he wanted to use Twitter to complement FB's goal of logging personal matters and in some cases over-stepping ethical and privacy boundaries. I commend twitter for not giving in at that time

For Google to buy Twitter would be a reversal of a very entrenched strategy that can be summed up as "No niches!". That's why they scrapped Google Reader. There are very few exceptions to this strategy (Google apps for work and some cloud offerings)

Twitter is not for everybody and never will be. Twitter is for those who publish information and for those who are interested in shaping their own information consumption beyond the daily headlines plus family and friends spam.

If Google buys Twitter in the hope of creating a realtime Google for everybody they will fail.

I hope they decide to reverse their "no niches" strategy, because that strategy has been very damaging indeed.

Twitter is not as big as Facebook, but it is not a niche service in the sense that Reader was. Twitter has 300M worldwide users and can count as users most global celebrities, politicians, artists, and journalists. People that make news. Reader is not a good comparison at all.

Whether you define a niche as 0.5% of the population or as 5% of the population is not important. Google doesn't do 0.5% and it doesn't do 5%. It only does stuff that is potentially useful for almost everybody (with a few exceptions that are targeted at IT professionals).

I don't know exactly what the potential of Reader might have been. Maybe something between 1% and 3%? It's the same ballpark as Twitter in my view, but that is admittedly rather speculative. It's also not the point I was trying to make.

A product whose primary appeal is to people who make and consume news is, ultimately, a niche product. The majority of people who Twitter might ever reach have seen it and realized it's not for them.

Twitter could absolutely be a valuable property, but it's never going to have the scale/reach of Google Search or Facebook.

>The company is a very different one now from years ago

In what ways?

Milo Yiannopoulos' recent 'RIP Twitter' talk covers this https://youtu.be/JoLs61YwuSM?t=1986

Google has developed a brand problem, similar that Microsoft. I'm positive that many would stop using Twitter if they bought it.

Google has 7 different products with over 1 billion users [1]. This "brand problem" you speak of, if it exists at all, doesn't seem to have slowed them down much.

[1] http://www.popsci.com/google-has-7-products-with-1-billion-u...

And all of them weren't launched in last 3 years.

Right because if you don't launch a product that reaches over 1/6th of the human population every 3 years your irrelevant.

Google Photos (launched in May 2015) reportedly had 200M 30DA a year after its official launch [1]. Sure, it's not a billion, but how many products do you know that reached 1B 30DA in their first 3 years? I can't think of a single one.

[1] http://www.theverge.com/2016/5/18/11685424/google-photos-upd...

And many people would start using Twitter if it was well integrated into some of Google's services.

"Google has developed a brand problem"

  You're spending too much time in the HN/Startup echo chamber. Google has no brand problem with public at large.

Good list, one thing you left off: Google is already showing realtime results from Twitter. They're well positioned in the deal because they know how many people click through

To be honest, I would much rather Microsoft buy Twitter than Google. Microsoft actually is showing they have learned from their mistakes...while Google quietly continues to make theirs.

Though to me it would make more sense if Twitter were a joint venture between various media outlets, sort of like how Hulu was funded initially. News Corp, Viacom, Disney, etc all buying large stakes in the company and taking it private to me is the best possible outcome.

Can someone actually explain to me how the situation came to this point where it practically looks as if Twitter's fate is being decided and played out in the media via endless speculation? It is not like Twitter is a tiny company with an unknown brand, few users and no possibility of improving its profit margins. I am not aware of what they are trying to do, but at the same time it is not as if they could have exhausted all the possibilities. Remember Facebook's beacon? That failed, but FB still managed to repackage the same crap into something more lucrative didn't it? Is this just impatience from stockholders?

For example, let us just say, hypothetically, something really damaging comes out about FB (e.g. the news about the fake video view metrics) and advertisers start fleeing from it. Wouldn't Twitter be the beneficiary of at least some of that exodus? Do they really have no option of an end game?

> Can someone actually explain to me how the situation came to this point where it practically looks as if ... Is this just impatience from stockholders?

Money doesn't grow on trees, and Facebook has lost a half billion dollars every year. They have maybe four years left at that rate before they run out of cash on hand. The numbers are improving by about 20 percent a year, which, if projected forward, means they'll stop losing money in ... four years.

I don't think it's impatience to question if your investment will go bankrupt or not. Impatience was taking the company public before it was profitable.

> For example, let us just say, hypothetically, something really damaging comes out about FB (e.g. the news about the fake video view metrics) and advertisers start fleeing from it. Wouldn't Twitter be the beneficiary of at least some of that exodus? Do they really have no option of an end game?

Why would you invest in Twitter if the only reason to expect a positive outcome was if Facebook horribly fucked up?

> Money doesn't grow on trees, and Facebook has lost a half billion dollars every year.

Dammit, Twitter has lost half a billion annually. Sigh.

> They have maybe four years left at that rate before they run out of cash on hand. The numbers are improving by about 20 percent a year, which, if projected forward, means they'll stop losing money in ... four years.

That's not accidental, that's called burn rate.

Wait fb is losing money? Sorry I couldn't parse that correctly.

No, I thinko-d that. Twitter is.

Ok thanks for the clarification

> It is not like Twitter is a tiny company with an unknown brand, few users and no possibility of improving its profit margins.

Investors -- especially for an established firm in a fairly mature market -- don't like "possibility of improving profit margins" (especially, when "improving" means "actually maybe delivering some profit"), they like a plausible concrete plan to do that with some indication that the firm has leadership capable of executing the plan.

"Maybe Facebook will implode and Twitter will pick up some of the debris and, hey, profit!" is not such a plan.

the beneficiary would be whereever facebook users go. I doubt that would be twitter. Twitter is a replacement for the rss/followjournalist/commentsection of newspapers, and a megaphone for celebrities and athletes. People go to twitter because the journalist/athlete/celebrity they desire to follow is a twitter user.

What baffles me is how Twitter has survived this long. They've never made money. Their service is popular with celebrities and the media which is not nothing, but most people who try it find it does nothing for them. Who's been funding them up to this point?

Unclear is what kind of "deal" they are talking about.

A considerable buy in? A full acquisition?

And, assuming a full acquisition... what would be the gain?

Google has a bad story with attempts at social media, apart from YouTube. (Bought Orkut, killed it, tried Google Plus, went nowhere). Twitter is hard to make profitable without alienating the users with too many ads.

For Google, it would probably be an acquisition like YouTube. With the knowledge that it might never be profitable, but intended to get control over a significant asset. But sharing Google infrastructure and resources could probably bring down operating costs in the medium term.

We'll see.

If it's Google then cue endless jokes about shutting it down.

I'm not saying they don't have some issues with their corporate attention span but I do get sick of that one being wheeled out without any real insight or cause.

> If it's Google then cue endless jokes about shutting it down.

Haha. That'd be the world's funniest acquihire.

Google wasn't given that reputation randomly or casually. They earned it through their actions and they deserve the consequences. People who don't know the pattern deserve to be educated about it. I weaned myself from Twitter when they added the algorithmic timeline but if I hadn't, I'd begin doing it now and I would be better off for starting it now at my own pace than later, forced to abruptly.

The point is everyone knows the pattern and it's not adding anything further to the conversation to keep repeating it. It's no better than parroting "Embrace Extend Extinguish" every single time Microsoft are mentioned.

Everyone knows because it gets pointed out and discussed, like this. It's myopic to assume that everyone is as old as you are and has been paying attention for as long as you have. There are people who are younger or newer to the Google ecosystem for whom it's not common knowledge.

Bought Orkut, killed it, tried Google Plus, went nowhere

> Don't forget Buzz! That time when they default opted-in Gmail users into publishing a list of frequently contacted users on their google profile. Auto-follow was a terrible terrible idea.

And Wave.

Wave was too ahead of its time. Bots in channels that could translate and issue arbitrary actions? In 2009? Nonsense.

I really liked Wave. It came out when I was in college and moving into an off-campus apartment with two other guys. We used it to coordinate who was bringing what (to not end up with 50 pots and three sets of chairs), and being able to have reply threads in the middle of a previous post was a great format for that sort of small group discussion.

It was not ahead of its time, it was poorly executed. People didn't know what to make of it. That is the designers fault. They needed to relate it to existing ideas and beat those ideas at their own game, even if that mean restricting what it can do to familiar domains. Then over time they can evolve it while taking the users along with them. Instead people bounced off it and decided to wait it out to see if they really needed it and it turns out they didn't.

Spereately, I think it's hilarious that many websites pester hard for emails, making them effectively pamphlets for their email content. If only there was a way that I could subscribe (and unsubscribe) to a stream of short notifications from content creators and be confident that I see all of them in a timeline order. Like what Twitter used to be before they screwed with the timeline. They're going to lose to email, and not for being ahead of their time.

> It was not ahead of its time, it was poorly executed. People didn't know what to make of it.

Eh, the biggest problem with using Wave was that it was only just barely usable on top-tier hardware of the time. So, for most people, it was impossible to run on their own hardware (especially on their laptops).

I think that if the performance hadn't been an issue (ie, the average hardware in 2009 had been capable of what it is in 2016), it could actually have been comparably successful to Google Docs or Google Calendar.

The ideas behind Google Wave are very very old, like Lotus Notes old. I worked on plugins Lotus Notes to do all sorts of Google Wave stuff. There is nothing new there. These ideas pop up on a regular basis and fail for the same reasons. My plugin took a week of training by very motivated users and they still struggled with all of the freedom. It was domain specialized, which helps, and all these years later it is still in use and they love it.

Google Docs and Google Calendar are very restricted in comparison. Gmail is as well. And search - type some words get an ordered list. If you don't get what you want try some different words. Pretty damn simple to use and explain.

> The ideas behind Google Wave are very very old, like Lotus Notes old.

The ideas behind Slack are very old. Doesn't stop Slack from being incredibly valuable as both a product and a company.

In many ways, Slack is trying to become what Google Wave tried to be at the beginning (a tool for real-time communication with, not just in chat/text form, but with other embedded forms of media as well).

Lotus Notes was very successful. They were acquired for $3.5B in 1995, long before our current bubble economy. It's likely Slack will progress along the same path - except it will be much faster now. If they don't sell out soon enough they will ride it into the ground and a new fad will take over. Remember Yammer? I don't see Slack as being different to the others. They don't have the talent or motivation to fix their core issues (Facebook does). Bots are not a panacea. Anecdotally I've noticed lots of people have already abandoned Slack because it is distracting and doesn't provide enough value. I expect this to continue. Busy people with jobs and lives will be the first to go and it'll be left with the annoying people with nothing better to do, kinda like Twitter. I think Facebook can and will eventually do a better Slack than Slack.

I imagined a "gmail inbox", but with each "email" instead being an arbitrary widget. So you'd share a spreadsheet via "email", but it's not an attachment... it's an actual spreadsheet being shared.

I was less excited when I found Wave was its own product, rather than a Gmail integration. Putting the widgets inside the same email inbox you have open for hours each day would be the best way to get people to actually use it.

Wave was Slack before Slack existed.

Aren't bots in channels a 1990s IRC feature?

Wave was actually rather great for groupware-like work on textual documents.

The Wave technology also now powers a lot of the "collab" features in their Office suite. So the "product" died, but the capability found a home.

http://hello.com/ I'm not 100% sure of it now but at one point there was some side group inside google building this.

Orkut wasn't bought, it was created by an employee as a 20%-time project.

How is a company which "might never be profitable" considered a "significant asset"?!

I assume it's because another company is in a position to capitalize on it in ways Twitter alone could not.

As a social network, this is probably valuable to Google's Ad business - gives more dimensions to a Google user if you link your Twitter account with Google account...just guessing ATM.

There's a lot of signal to be had in Twitter, signal which can be (and has been) turned into revenue not directly gained from it's users or advertisers.

Remember the story about Dataminr and its Government contracts?

The same thing was said about YouTube because of its immense costs of operations and the fact that few/nobody had figured out how to do a good job monetizing video advertising at that point.

Google being the ad monster that it is, could significantly boost Twitter's business and they could slash the operating costs very considerably. Twitter should be solidly profitable at $3-$4 billion in sales (which Google could deliver).

Money isn't everything.

YouTube is a hugely popular service, driving lots of data, traffic and brand image towards Google.

Could be the same for Twitter.

I'm not sure if brand image is something YouTube gives Google. I honestly don't think the general public knows that YouTube is a part of Google. YouTube seems like its own separate thing to the casual user. It would be interesting to see a poll of the general public.

But the data. The data is key. They have rocked image recognition and video is a huge data source for their ML efforts.

YouTube isn't profitable either.

http://www.businessinsider.com/youtube-still-doesnt-make-goo...

Controlling the narrative.

See who has been banned from Twitter. It's not BLM people celebrating cop murders, it's people posting too many #StopEnslavingSaudiWomen tweets.

http://www.breitbart.com/tech/2016/09/21/twitter-suspends-wo...

> Bought Orkut, killed it, tried Google Plus, went nowhere

Add Jaiku.com

https://en.wikipedia.org/wiki/Jaiku

Sorry I don't think youtube is profitable by itself and sustainable.

Although its the biggest video platform in the world attracting 1/3 of the worlds population to it. I think the data itself that can be gathered via youtube are profitable for google and google's purpose really (AI).

If they buy twitter it won't be because they can turn it into being sustainable itself but because they can make it profitable for them and not in money. Personally I don't think that google has a money issue and I think for them its easier to value data more as a currency.

I said that they probably bought it with the assumption that it might never be profitable.

As far as public information goes, Youtube is most likely not.

>Twitter is hard to make profitable without alienating the users with too many ads.

TBH I don't think google would buy Twitter with the expectation of making money off of it. Its value is its continued data gathering, which would inform other google products.

This, and perhaps a deeper integration in Android.

If Google buys Twitter and then kills it, we should mint them a freaking medal for services to humanity.

Salesforce feels like a bizarre choice, although I agree with their digital chief that "I love Twitter" personally.

I use twitter every day as my primary method of content discovery.

So at their core the BUSINESS should revolve around monetizing my eyeballs, eg advertising.

So to me it's Facebook or Google that should grab it, w/FB at the lead considering their relatively smooth / unhurried / and successful takeovers of whatsapp / instagram

Perhaps there's some back end tech, talent that would be useful for tackling Salesforces problems.

Salesforce's back end is AWS. They ran their own cloud for a while, but ditched it.

Incorrect.

O RLY??

http://www.channelregister.co.uk/2016/06/03/salesforce_aws_m...

Things are in flux, but the original statement that it's in AWS now is still incorrect. The core app (and some acquired apps) is/are still on their own gear. Moving everything from their hosting environment to AWS (if that's even what is planned) would take many years.

http://trust.salesforce.com/trust/instances

These are all running in SFDC datacenters.

Not yet. I believe they will be using AWS to serve Australia and/or Brazil. That or offer completely new service built on AWS, given $400m contract. Heroku runs on AWS, but its hardly integrated with SFDC.

There are quite a few former SFDC employees who left for Twitter, so maybe it's a grand scheme to get them back...

Salesforce has this weird hosted private social network called Chatter. It's closer to facebook statuses than twitter.

I'm not if there really could be a tie in, but one thought is that if a company could take an internal chatter post and promote it to public, that public post could be spread via twitter.

They could already do this using Twitter's API. Seems like a stretch of a reason to buy Twitter.

Twitter's real value to Google is real-time search, in my opinion. They already license results from Twitter for search results, but having access to all of that sweet, sweet real-time data is nice.

The social graph is nice, but between Chrome and Gmail, Google already knows quite a bit about everyone.

Bad idea. I think the social networks who's main purpose is to feed into people's vanity will not stand the test of time since they're not solving a real problem and are merely novelties.

I think Twitter's recent foray into becoming a content streaming source (see: NFL) is very interesting and a natural next step, albeit a late one. The user base is already there to essentially compete with Twitch and other streaming providers.

Why can't youtube live replicate this streaming service and give even more split ad revenue back to NFL, CBS, etc.??

My bet is GOOG. They need a streaming newsfeed product in which to insert ads.

Also, better youtube commenting system?

> better youtube

Two words that probably won't be said about any feature Google creates. They seemed determined to kill the platform.

What is this inane trend here on HN of referring to companies with the names they are registered to stock exhange?

It shows that we are #savvy.

For many of us its sheer laziness and its been this way for a long time. GOOG is faster to type than Google. (This is especially true for MSFT.)

I remember MSFT being a common reference on Slashdot way back when.

I like that it is more accurate than saying Google ( it's Alphabet now after all), while still using a reference we are familiar with.

Shorthand.

This could be pretty cool. There are times when I search for something that happened recently (say, 20 minutes ago in a live sports game, or if I see 6 police cars blocking off the street out my window) and google has no record of it, or sometimes the news tab stories are now wrong/obsolete. In these cases I'd love to see twitter results, particularly from "trusted" sources like reporters or news orgs or even just from popular sources.

(Presumably Google could work out this deal now without buying twitter. But it could be a benefit, similar to how the videos tab is mostly YouTube).

Google already pays Twitter for access to the firehose and does display recent tweets that are relevant at the top of the search results page.

What else do you want Google to take over?

Maybe ATT? Verizon? Comcast? TWC? All other ISPs? How about Walmart? And maybe Google could even buy local governments to make things more streamlined.

And we all could pay with Google dollar, and have Larry Page as world dictator.

Google already has faaar too much power and should be broken apart, giving an entity organized like a dictatorship – which all non-coop companies are – even more power basically would mean Google would become more powerful than most small to middle governments.

Twitter's Executive Chairman, Omid Kordestani, was SVP of Sales at Google. He may be their internal sponsor as well.

Yikes. If Twitter starts to insert ads in newsfeeds, a lot of people are likely to quit right away.

Uh, they already do

???

Been using Twitter since 2008 and I never saw any.

* GOOGL

They are called Alphabet Inc. now.

Seeing a lot of arguments about profitability that don't make sense. At Twitter scale, profit sensitivity to even minor tweaks in ad rate/targeting/placement is massive. They could also go into 'maintenance mode' tomorrow and break a massive profit (it would just be stupid).

Active users is a poor metric for Twitter. It's much more about the views. A relatively smaller number of people on Twitter can command an outsized influence. It's a fundamentally different kind of network.

Twitter's future will probably be more about monetizing its viewership. It's definitely not going to disappear anytime soon.

OH: "Twitter is a Friendster whose Facebook hasn't appeared yet."

From Jessica Livingston yesterday: https://twitter.com/jesslivingston/status/778948962724315136

Is Google the suitor, or, is Alphabet the suitor? The article says Google, but this could be out of habit. I am not sure that answering my question changes much about the news. But it might say something about how Alphabet views Twitter based on who they decide owns the acquisition and where Twitter would fit within the company (as subsidiary or under Google).

My bet is GOOG. They need a streaming newsfeed product in which to insert ads, especially on mobile where FB is killing it.

GOOG has to buy TWTR or its real-time web ambitions are dead. FB has to buy TWTR to prevent GOOG real-time entry. AAPL has to buy TWTR or be cut out from social media. MSFT too. The bidding war that is going on behind the scenes must be unreal. This acquistion may be the biggest ever.

Anecdotally I use twitter to advertise my SaaS monitoring product, Cronitor, with far more success than we found with AdWords. The ad platform feels easier to use, and promoting content on Twitter is less of a time investment vs selecting, culling, and optimizing sets of keywords.

I really can't see salesforce buying twitter. I think a social media giant would gain something from twitter, but not much else.

I think it would be stupid too but the article does contain an executive being fairly direct about wanting it and why.

Yea I read that, but I don't see how it really benefits Salesforce. I can see why the executive likes it.

I think it makes a bit of sense. For a lot of companies Twitter is already a major point of customer interaction and retention. Maybe Salesforce feels like they could monetize that aspect of Twitter, with the advantage that a ton of consumers are already there and using it.

It will introduce a conflict of interest, where the side that has is paying Twitter.

The perception alone of a conflict means people will 'find' it all over the place and those examples to their bias until slowly and gradually no one will trust the service anymore. Even if Twitter never changes anything.

It could enhance and supersede Salesforce's already existing Chatter product (an internal social newsfeed).

What if the social media giant is wondering about its own shelf life?

Perhaps off-topic, but does anyone know why Twitter gave up on its effort to monetize its API? There was a moment, circa 2010, when that seemed like the obvious move. When Twitter first began to shut down access to its full firehose, it seemed clear that there were businesses willing to pay for its information. But Twitter suddenly turned away from that idea, and focused on advertising. Considering how many sites compete for advertising dollars, it seems crazy that Twitter felt that was the right way to go.

But then Facebook went down the same path, first promoting its API, then largely giving up on any attempt to monetize it.

And before that, way back in 2006, I tried to build a business that would rely on Technorati's API, which they briefly promoted, then gave up on.

There are a lot of companies that make money by selling information via an API. And there is tremendous competition for ad dollars. These 2 facts would lead me to expect more companies might try to make money from their APIs. But what happened in Twitter's case?

I wouldn't blame Jack one bit for wanting to get back to Square full-time (not that it's necessarily fully his decision to sell).

It doesn't matter it would still not cover my losses in the stock. Talk about crappy decisions.

To me Twitter has always been real time news.

Why haven't they worked on a way to 'validate' tweets around a story, I can't understand it (from a biz perspective, not technically).

With validation they become, instantly, the #1 news agency in the world.

Would it be a bad idea for Twitter to charge a small yearly fee for use? The reason why I think this might work is because some users are very loyal and might not mind spending $20/year for an advertisement free Twitter service. They have about 350 million users, according to a comment here, and if 50 million users would stay, that would be $100 million revenue per year, and with many fewer users, their cost of doing business would be reduced, but with reduced network effects the service would not be as valuable for users. I like Twitter and I would pay $20/year in return for no promoted tweets.

So they'd convert 15% of all user accounts (many user have more than one account)? That seems really high - 1% might be attainable. Hardly the numbers they need to justify their valuation. Maybe if they lay off a ton of employees and start getting lean, while keeping their current revenue?

Stock is through the roof right now. About +19%

Oh good. Just 30% off from when I first bought in.

I would pay $10 a year to use Twitter. It's just that good for live news.

By Salesforce?? RIP twitter.

C'mon, no one knows how to run indefinitely at a loss than Salesforce...

Indeed. They've never turned a profit either, right? I still can't fathom how/why they're sinking half a billion dollars into that new building in downtown SF.

At the end of 2015 Twitter had 3900 employees [0]. Why would they need close to that? How many could a new owner fire without noticeably affecting the day to day operations?

[0] https://www.statista.com/statistics/272140/employees-of-twit...

I wish Slack would somehow take over Twitter. Expertly adding in custom channels would save the social platform.

By any normal metric, Twitter is a huge success. 300 million people find their service useful.

But it was already huge success when it had no business model. Moreover, what is fundamentally valuable about Twitter to its users--sharing and discovering little bits of textual expression over a publicly visible social network--is not very expensive.

From the perspective of the users who find it valuable, why does it need a for-profit model at all? Why can't we just subsidize it as a non-profit via grants and donations, a la Wikipedia? I'm pretty sure you could do the important thing that Twitter does--ignoring all the extras devoted to figuring out how to extract more money from the data--at a small fraction of its $2 billion in revenue.

I'm not being naive here--it's quite obvious why things are the way they are. But there many examples out there of making a big impact while making a decent living (just without anyone trying to become a billionaire). Social networking is ripe for more of this approach. The attempts so far have failed not because of their business model, but because of the usual reason: poor execution.

>>By any normal metric, Twitter is a huge success

Revenue - Cost is perhaps the most normal metric

>> By any normal metric, Twitter is a huge success > Revenue - Cost is perhaps the most normal metric

Badly chosen phrase. I'm not saying that currently Twitter is not a business failure--it is, at the moment. But from the perspective of providing value to many people, it's doing very well. Plus, the cost part of the equation is driven at this point largely by trying to figure out how to make more money, not by continuing to provide a valuable service to users. (The making-more-money thing is obviously not working yet.)

The alternative model is: lower costs drastically by focusing on doing a handful of useful things well. And then you might be able to raise the money to cover those costs the way Wikipedia does.

Look up "app.net". It's been tried. It failed.

Out of those 300 million monthly active users, I wonder how many are actually people. As far as I can tell, Twitter still has a big problem with bots.

If you try to make people want what you make, you end up making something disposable, a short-lived romance.

Amazon or Facebook . It would make sense for the latter as it is its only real competitor.

Facebookgot big by copying the twitter timeline. They won't buy them. Not for the product, not for the team

Why are Twitter's expenses so high? Don't get me wrong, scaling is hard... But at the same time, they don't have the issues of scaling photos or videos (like Facebook).

They host both those things...

They aren't investing in the present value, they are investing in the future value. Is Twitter going to be more or less relevant in 5 years? 10 years?

Why no mention of Oracle? That's a more likely acquirer than Salesforce.

Other Oracle acquisitions: Datastax, push.io, Collective Intellect, etc.

Has Oracle shown an interest? But like Salesforce, why would Oracle they be interested? I may be missing something but it is not at all obvious how twitter is related to the type of thing those two companies are currently doing.

I had to come here to read some saner comments; the comment section on the linked CNBC article is, uh, deplorable.

Is it logical to buy Twitter at $ 16B? I think it is too expensive considering a lot of their actual users are bots.

A lot of everyone's users are bots.

Twitter should be a public utility.

It is a public utility.

it's a "private" utility. But I take your point.

If they remove all the fat making a tweet page 5mb it could be hosted for nearly nothing by some FOSS org.

Except for all the backend connecting each user's messages to their followers. That's no mean feat. And certainly would cost more than "nearly nothing".

Yes, Twitter's backend is actually quite sophisticated.

It's one thing to build a very small Twitter clone for you and your friends, it's quite another to scale that up to hundreds of millions of users and keep everything running smoothly.

But that's exactly what is what as the beginning. Twitter spent a significant amount of its early days sitting on the Fail Whale screen. Sure, now it's stable, when you throw a complete rewrite, and millions of dollars at it.

That would be nice but who would pay for servers? I would love an "Open Twitter" built on standard protocols and implementable by anyone, however if SMTP and NNTP are any indication, most people prefer convenient silos over open solutions. And the reality of a hostile internet mean that there is a need for active resources devoted to protecting any service from abuse.

> most people prefer convenient silos over open solutions.

Most people don't care one way or the other. They just want it to do what they want/need.

And they also want their friends to be on the service. That's what's really important, and why a lot of open solutions didn't take off. No one they cared about was using them.

Something like wikipedia would be nice.

Isn't the problem with NNTP that people are being pushed away from it rather than not wanting to use it?

I've been thinking about how something like this could be done in a completely distributed way, I think I've even seen some research implementation of it. In any case, it'd be interesting...

Hmm... http://twister.net.co/ maybe? The biggest issue is going to be mobile, but if you have enough people firing it up on servers and stuff, you'd probably be okay. And then of course you realize that there's also the even bigger issue of actually getting people to use it. You're fucked there unless you have some serious marketing talent, which most people capable of writing such a thing in the first place lack.

Why?

The only thing twitter does better than basically anything is:

Has a giant userbase containing many influential Internet celebrities.

Except for that it is inferior in almost every single way, starting with the ridiculously low character limit, continuing with the spam everyone all the time etc the list goes on.

Hey, even google+ is better in several ways, except for the part about Internet celebrities.

That ridiculously low character limit is one of the reasons I'm active on Twitter much more than anywhere else, as it forces people to be concise. And for everything else, like complex thoughts that can't be expressed as tweets, there are always blogs, whose URLs you can also distribute via Twitter. Twitter basically works like your personal aggregator of interesting stuff. And I freaking hate people using Facebook or Google+ for blogging, because these services suck for blogging.

On spam, I don't know what you're talking about, because I get no spam. I'm @alexelcu on Twitter, my account is from 2008 and I'm counting about 20 blocked accounts corresponding to about 20 spams I got in 8 years, which is actually rather impressive.

I think people complaining about the char limit don't understand the value of Twitter.

And no, Google+ seriously sucks, I could rant all day about how much Google+ sucks. And you know what? Google+ wouldn't need Internet celebrities if it would be compatible with the open Internet, but it isn't ;-)

Counterpoint on the spam thing: I get a noticeable amount -- one a day or so -- of spam followers. That is, accounts that follow me entirely so I'll see their name in the notification email, and then unfollow me within a day.

It's an interesting form of spam, which isn't trackable by observing Twitter message traffic as it lives entirely in account metadata.

Eh by spam-everyone-all-the-time I mean that any message I post will be "spammed" out to all my followers even if they just follow me for my Java interest or because I sometimes tweet about local politics.

But this is one of the things I like about twitter :) Well, most of the time. Sometimes you find out your heroes are terrible people.

When it works you find out things you didn't know you were interested in - getting out of the 'filter bubble'.

Not with these guys in charge I hope :

“I believe we need to build a platform that respects and amplifies every voice in a way that the world needs to hear it. I trust that the world will amplify and retweet and have conversations where appropriate.” [1]

Which means "Kill the cops" is ok but "#StopEnslavingSaudiWomen" gets your account banned. [2]

[1] http://www.breitbart.com/tech/2016/06/02/jack-dorsey-blms-de...

[2] http://www.breitbart.com/tech/2016/09/21/twitter-suspends-wo...

You are not wrong, but linking to Breitbart probably damages your credibility.

When most media is paying Clinton [1] calling doubts on credibility is laughable tbh. especially in an age where if one is piqued one can right click ... search and go look at places you trust.

[1] http://www.politico.com/blogs/media/2015/05/clinton-foundati...

I agree with your disapproval of twitter's leadership, and recognize the factual basis for it. I am only suggesting that some of your audience might be biased against you and your comments depending on who you cite - even when the facts are simple and easily confirmed. It's not rational, but its common. For example, I might (unfortunately) unconsciously question the intelligence of someone who linked to buzzfeed, even if buzzfeed accurately reported relevant facts in that instance.

Just going to leave this here (from last month):

http://www.abc.net.au/radionational/programs/downloadthissho...

"Twitter will be sold in six months - Kara Swisher"

I'd be curious to see a statistical analysis of how unlikely it is for there to be predictions of something like this on any given timeframe. Whenever Twitter got sold (or didn't), what are the odds that some vaguely recognizable name would have "predicted" it?

To do this analysis we would need some kind of easily searchable corpus of simply-worded predictions, issued by a sizable fraction of public personalities. Hmm...

If there is anyone who could mess up Twitter worse than Twitter it is Google.

If google buys twitter, I'm out

Anyone else see S20E02 of southpark? All I'm going to say is it put Twitter in a very interesting perspective.

any idea why advertising is working on facebook and not on twitter?

There are better alternatives to Twitter out there. It’s time for everybody to move on.

Such as?

Parent post's product, Sublevel, would make for a nice public communication utility.

Unfortunately, while I like it, it's definitely not going in the same direction as Twitter and is not likely to match everybody's idea of a social network. While its current members, myself included, like it for its simplicity and lack of embellishment, it is precisely because it comes with fewer features and deliberate design choices against janky embedded media, it does not and likely will not represent a Twitter alternative for the vast majority of Twitter users.

Sublevel could however be made into an interesting, social-first alternative to Pinboard.

If Sublevel were for sale, that's likely what I'd do with it, offering an archive utility to save HTML where duplicate content is only saved once and blindly shared among users to conserve space. Then stick an incrementally increasing price tag on membership like Pinboard. Maybe membership tiers.

I remember as well numerous decentralised alternatives to Twitter like Diaspora and Twister IIRC.

Twitter is horrible to use and would benefit from a complete rethink in terms of UI, maybe something along the lines of Opera Coast.

GNU social [1], Mastodon* [2]

There is a set of standartized web protocols called Webfinger, ActivityStreams, Salmon and PubSubHubbub which allow websites to interact with each other as a sort of decentralized/federated Twitter (this is called the "fediverse").

[1]: https://gnu.io/social [2]: https://github.com/Gargron/mastodon

Disclaimer: I'm working on Mastodon, it's a new open source implementation, I'm trying to make it more approachable to people who value UX and maintainability

Nice thing this mastodon.social, how do I reach out to people/interests ?

Short answer: The sidebar has a form at the bottom where you can enter a username@domain to follow them. For that method, you have to know the user in advance, realistically atm you can browse the public timelines on quitter.se and quitter.no etc to see who interests you (or ask friends who're using the network, etc).

I'm going to eventually implement a "who to follow" suggestions section to make this process smoother.

Mentioning people in statuses works the same as in Twitter, except if it's a user on the same domain as you (e.g. mastodon.social) you can enter their @username, but if they are somewhere else, you enter @username@domain.

If you are replying to a status on your timeline, the mentions are pre-filled like you would expect from e.g. TweetDeck to save you the typing.

Edit: You can follow me as Gargron@mastodon.social

Telegram channels

https://telegram.org/faq_channels

Not using Twitter.

I think Gab.ai is competitor, thats gaining popularity.

It has the same issue Voat does: the people I want to avoid went there.

Isn't that a good thing though ? More choices, more people will self segregate out.

The people I tend to agree with are just as prone to group think as conservative-leaning people. Hate grows in the absence of disagreement, and it doesn't stop at the echo chamber's walls.

So what do you actually want from a community then ? It seems like you don't want certain people in it, but at the same time you do want them in it. I'm not sure if I'm understanding it correctly.

I'm assuming he doesn't want a community with only people he doesn't like nor a community with only people he likes. So he wouldn't move to a service where all the people he dislikes moved.

I've heard GNU Social is doing quite well at the moment too. Probably cause quite a few internet communities have been encouraging people to use GNU Social instances instead of Twitter.

Salesforce wud be an interesting prospect. Not sure how wud it fit in their business plan

"wud" is not a word. Use English. please.

Not sure how wood it fit in their business plan

Please use periods at the end of sentences. This is Hacker News for crying out loud.

Not sure how wood it fit in their business plan. . . . . .. ..

Please capitalize appropriately.

Please send a pull request.

Might sound strange, but I think this would be a great purchase for Apple. They have the cash, they certainly have the engineers and UI skills it desperately needs. iMessage working brilliantly, but closer integration with a Twitter style feed makes real sense to me.

Actually, with the new iMessages app platform I wish all my Twitter conversations moved to iMessages. If Apple buys Twitter, that would be personally awesome.

I can only imagine what Apple will do with censorship given their app guidelines and general attitude towards editing their own user forums. Ping wasn't such a hit either.

Reply on news.ycombinator.com