Disney Considers Offer for Twitter
wsj.com
wsj.com
Twitter is, more than anything, a media company. It's a bit unfair they're compared to tech companies in terms of performance.
Twitter is a cultural phenomenon more than a product. That's why I'm always skeptical of people questioning its long term success. Unless another platform emerges to replace it, its cultural momentum should be enough to sustain its presence, even without profitability.
Maybe Twitter will never be individually profitable, but it has enough cultural power for a large media company to justify subsidizing its costs with profits from the overall income of a media empire.
As such, Twitter seems better off as a unit of a large media company like Disney rather than a calculated profit center like Google or Facebook. Its synergy with other products can make it a sustainable investment for a media company.
Disney was one of the first companies to popularize Twitter, as ESPN and ABC contributed to its early growth by bringing athlete and celebrity tweets into the mainstream. The Disney media empire benefits from this synergy with Twitter. It therefore makes sense for Disney to roll Twitter into its media portfolio.
Stupid question, sorry -- what's their business model? Paid commercial accounts? I don't look at twitter often but I don't think I've ever seen ads.
How journalists, bloggers, and other professional outrage generators feel about Twitter's policies isn't a great metric for the current or future success of a platform.
How is Twitter any different in this respect than FB?
On Twitter you follow people you want to follow, who produce content you find interesting. There are subcultures. There's personality. There's less social pressure to follow your aunt, uncle, or distant co-workers from 2 jobs ago. The people you don't want to follow tend not to be even on Twitter, the people who just want to chatter are happy on Facebook. The smaller social graph of Twitter is a feature (from the users' point of view) because the ratio of signal to noise is higher. So it is more about content.
If you use Twitter the way you use Facebook, and make it about your real-life social graph, you'll likely find it uncompelling.
There's more marketing-signal in knowing you're a techie than who your aunt is.
If Disney buys Twitter, every star in their stable will likely be required to tweet out a certain amount of content every day. Freshface McSongbird and Heartthrob McCleancut will tweet about going to see Rogue One in theaters, for instance.
They could exploit the 'promoted tweets' more, but you could buy an awful lot of promoted tweets for less than 20bn.
Since they can already use Twitter for free, I assume it's all about the analytics.
But this is all a guess. I have to say that the Disney execs I've met have all been very smart and good at execution.
The company has never made a profit. How does comparing them to other media companies instead of other tech companies change that?
The conversation about whether twitter will be successful at streaming live content is interesting, but probably just one of those things that demonstrates whether or not they have _further_ growth potential into other spaces.
Twitter is already where lots of people go to talk about sporting events, news as it's happening, shared experiences like TV watching, and so on.
To the extent to which Disney can get access to users in the throes of emotion or facilitate deeper investment in their properties is probably useful for Disney on its face, even before anything more is built on top of or into twitter.
I'd submit one of the ways in which Twitter is "pretty good" about fan communities, by being relatively permissive about IP they don't particularly care about, is precisely a way in which Disney is constitutionally incapable of being. Disney has long been notorious for being very, very heavy on the control side of its IP. Buying something because of a fan community that you plan to essentially immediately squash is a rather silly acquisition.
"Relatively permissive" here doesn't even have to mean IP abuse (which Disney certainly would squash), but even things like expressing unfiltered negative opinions. I just don't think Disney has the cultural DNA to deal with that in a way that even remotely resembles Twitter.
Twitter doesn't host video of substantial duration or audio, and comment threads everywhere are already the same mess (just at a different scale w/r/t twitter).
I dunno about anybody else, but this gives me Myspace flashbacks - an entrepreneur offloads his slightly over-the-hill social media platform to a passing old media dinosaur in exchange for a ton of money, and leaves them holding the bag throughout it's inevitable decline. With Dorsey's leverage as a Disney board member, Twitter might be able to pressure or convince the company into doing things it wouldn't otherwise do, if it was thinking straight.
Maybe I'm wrong, of course, and Disney does have good plans for Twitter, but there's a little alarm bell ringing here.
Just keep the lights on, maintain the software and it would mint money.
For Disney/Google, it's $10-20B in value that they CAN'T capture themselves and don't have the DNA to do so, so it's far more valuable for them at this price.
If Twitter were $5B, then I have no doubt Facebook would try to snap (no pun intended) them up.
I'm just guessing here, but from the stories about how Disney did the whole import H1B people and have current employees train them before firing -- it doesn't sound like they (Disney) know how to treat software developers.
On the other hand, something might finally be done about the harassment of the few remaining users.