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Well, one would hope so. Fortunately, Twitter doesn't have one of those "president for life" two-class stock setups like Google and Facebook. The stockholders can fire Dorsey when necessary.

The post-growth phase of a social network doesn't have to mean its collapse. Look at IAC, InterActive Corp (iac.com, ticker IAC). They run a lot of sites - Vimeo, Ask, About, Investopedia, Tinder, OKCupid, etc. - have a market cap of about $5 billion, and keep plugging along. They were started by Barry Diller, the creator of the Home Shopping Channel, something else that keeps plugging along. Diller is still CEO. IAC is boring but useful.

Twitter doesn't have to "exit"; they're already publicly held. They just have to trim down to a profitable and stable level, and accept that they're post-growth.

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This is a great comment. For most companies, grinding along and sometimes taking a hit, firing people, slow things down and then pick it up again and grow, is the norm. If every company that stops getting massive growth would stop, we wouldn't have factories mass producing our day to day products, the post office wouldn't be delivering us goods anymore, etc. twitter is a mature organisation. There are jobs. There is cashflow. We should stop letting journalists make a big deal of companies that don't have infinite growth and applaud the entrepreneurs that build the monster.

There is another angle that we often don't consider: who the media writes for. In general, the financial press writes for investors (this is the same for the tech media), and so their alarm bells and dire predictions are for investors, not necessarily about underlying fundamentals or facts of a business for everyone else.

- Are these jounalists working for media companies that are competing for time?

- If they are shareholders, they don't seem to be declaring their conflicts of interest.

- For Twitter to respond would require that Twitter be taking editorial positions regarding the activities of competing media conglomerates. ("You're down, you should all just cash out now" [while you have far more daily active customers and revenue per user than a number of TV channels combined].

- Are there competing international interests and biases? Is the market for noiseless citizen media saturated? How much time is there, really?

I'm not sure if I'm understanding you correctly, but I think you're considering Twitter to be a media company, like a newspaper company? If so, I don't think that comparison is accurate so there'd be no conflict of interest really.

The conflict of interest is if the journalists owned shares of Twitter.

The conflict of interest is that one media company is publishing negative articles about another media company amidst acquisition talks.

What is their interest here? How do they intend to affect the perceived value of Twitter? Are there sources cited? Data? Figures?

I'm still a bit confused. Are you implying that Bloomberg and Twitter are in competition? I'm not so sure they are, really, in any sense.

Bloomberg is a private corporation which sells ads and exercises editorial discretion in publishing market-moving information and/or editorials.

Twitter is a public corporation which hosts Tweets, sells ads, and selects trending Twitter Moments.

Both companies are media services. Both companies compete for ad revenue. Both companies compete for readers' time.

(Medium allows journalists to publish information and/or editorials for free (or, now, for subscription revenue from membership programs)).

>We should stop letting journalists make a big deal of companies that don't have infinite growth

Im not sure if thats the main audience pushing the narrative of growth. There is an industry that created the "growth hacker" position, and I dont think it was journalism.

But then the media could at least question those assertions along with the narrative.

> There is an industry that created the "growth hacker" position, and I dont think it was journalism

True but it seems that most journalists were keen to embrace that credo. At the end of the day, "hockey-stick growth" has become the predominant narrative; does it matter much where it came from initially?

> They just have to trim down to a profitable and stable level, and accept that they're post-growth.

A phrase that sends shudders through stockholders!

It is amazing that companies seem to think that there is infinite growth potential if there ever was any growth -- sometimes you are just at your max level!

I don't think twitter is at max level, I just think that what they think is innovative is not innovative to users.

If you're at your max level then you need to have been profitable quite awhile ago. They aren't and have never really been close.

And if they were to go for profit now they'd be worth of a market cap of a couple billion - many times lower than what they are now.

And that's fine, right?

Market cap is more of a measurement of hype around a tech stock rather than its actual value.

Market cap is a measurement of what investors think the company's value will be after taking into account future prospects (as opposed to what its value is today without considering the future). This can occasionally lead to weird situations like companies whose market cap is less than the value of the company's assets.

Yes, and what investors think of future prospects are influenced by hype.

...unless your revenue is fine, but you've hired a couple thousand more people than you should.

> A phrase that sends shudders through stockholders!

Growth is good because it causes the share price to increase.

However, a company with low (or zero) growth and solid profits can still be a good investment if it pays good dividends.

Unfortunately, Twitter does not have growth or profit.

Twitter has huge room for growth, at least 10X from where it is. I just don't think they have done enough to figure out what is preventing so many other people to become its frequent user. In my own experience, I find Twitter's newsfeed algorithm pretty bad and completely lacking stickiness. I can easily find stories that would have kept my attention which should have ranked much above. The presentation of content is fairly complex (too many # and @ to parse). Ranking of re-tweets is especially bad. Lot of essential tools are still missing, for example, I can't even search my own tweets effectively. Lot of essential integration is left to 3rd parties (for example, no official Chrome plugin). If you think about it, we communicate a lot like Twitter by using medium of text messages. However text messages lack lot of desirable features (non searchable, history gets purged, hard to create one-off groups etc). Twitter, if done right, can replace text messages and even emails at large extent in addition to social aspects.

I've recently started using Twitter more to stay in touch with deep learning community and I can absolutely see why less tech-savvy non-fan user would turn away after few attempts. I can also see if they can turn this around and grow 10X in terms of DAW/MAU with good product planning.

The inability to search my own tweets is a huge annoyance because I use retweets and likes as a log of content that I like and admire.

Agree. One more thing they should do better : List

Do you mean Lists? It's a great feature, but Twitter hasn't leveraged it yet. Only power users seem to do anything with it.

So you mean make it more Slack-y ?

It's dying because they didn't manage the tweet-storm dynamic. Journalists love it -- it means they don't need to leave the office and find actual news stories to report -- but to the ordinary public it's a platform for expression that might as well have "DANGER: LANDMINES" signs posted all around it.

Come and hear angry people ranting at the internet!

Rants and tweet-storms get lots of views, lots of clicks. But they are not necessarily what most people want to see. Most people are not on Twitter most of the time. And for most people, their primary exposure to Twitter is "oh look, there's yet another news story about a "public backlash", with a selection of angry tweets embedded in the article".

This is certainly a big turn-off for me. Why should I care about a platform apparently tailored for self-promoting celebrity gossip and low-content, high-drama flamewars?

Beyond that, I've never been able to make any sense out of their threading system; the only way I can figure out what is happening is if someone inside the mess writes an article explaining it and quoting the relevant comments. The actual feeds all seem to be incomprehensible mishmashes of quotes and references to people who aren't present. (I assume there's a view which makes it all hang together if you have an account and actually log in rather than simply browsing, but the fact that I can't really see what's inside the box means I have no motivation to get involved.)

Furthermore, getting too comfortable with a communications medium solely owned and controlled by a single company seems like a recipe for long-term disappointment.

They mess with the chronological order of my timeline and I'm grabbing a hatchet.

The problem is that there are like 10 different types of people with different use cases.

I prefer Twitter when getting information for industries and technology . User exp is better than fb in my opinion. . But somehow they stop making it better . . For simple searching function ...they made it stateless and your search result got refreshed every time u return back to the search page... you have to re-search it again

The problem here is that it isn't Twitter that needs to accept this but Twitter's shareholders.

Other than that I am totally in agreement with you, Twitter is a success, just not as big a success as some people hoped but that doesn't mean it needs to sell to the highest bidder either. It's just another large company making a modest profit, and there is nothing wrong with that.

This! A thousand times this. Investors know that infinite growth in a finite environment is impossible. But, they always seem to expect that their project should be an exception, or at least, it should push everything else aside and take the world for itself. Can't we all just get along?

I propose that we call this the Scarface effect: "The world is not enough."

I think this is the fundamental misunderstanding about growth, one that is generally carried by post-growth and deep ecology people. The growth we're talking about here is growth of economic value, not growth of resource consumption. Yes, resources are finite (oil, total attention time of people), but economic value is not.

Entrepreneurs are in this game to create more and more economic value from the same finite resources. Take time: people have roughly the same time now than they had 40 years ago. Yet, we create way more economic value out of this time than 40 years ago, because our productivity has gone up.

Resources are finite, economic value is potentially infinite. Therefore, yes, you can have virtually infinite growth of economic value.

> economic value is potentially infinite

Do you mind explaining how? I'm not sure I understand.

There is a theory in economics that while resources may be limited, through substitution economic growth is limitless. If growth in an economy is limitless, the economic value of a company is potentially infinite.

http://freakonomics.com/2014/01/24/can-economic-growth-conti...

I'm not saying this is right or wrong, just trying to explain the thought.

It's wrong.

The concept of infinite substitutability was presented as a "principle" in a 1976 paper, itself trying to argue out of the all too obvious implications of Limits to Growth (1972).

"The Age of Substitutability", H. E. Goeller and Alvin M. Weinberg, The American Economic Rrview, Vol. 68, No. 6 (Dec., 1978), pp 1-11 https://www.jstor.org/stable/2951003?seq=1

Somehow this hypothesis has been raised to the level of a scientific law of economics, trumping thermodynamics, physics, chemistry, and 216 years of actual experience of the Industrial Revolution and subsequent industrial periods, as well as economics' own law of diminishing returns.

There's nothing here but wishful thinking.

https://books.google.com/ngrams/graph?content=infinite+subst...

Yey, I wasn't talking about "infinite substitutability" here. Although it's part of the equation. I'm talking about productivity. How you can derive way more value now from the same quantity of resources than you could 2 centuries ago.

So yes, there is a ceiling in available resources (although there's a whole lot of resources that we can tap in the solar system alone), but as long as you don't see a ceiling in productivity improvement, you don't see a limit to growth.

You may not think you are, but you are.

For productivity, virtually all of the Solow residual disappears if you add energy as a factor. R. U. Ayres and Charles A. S. Hall are two (and independent) authors among many who've demonstrated this. Ping back if you'd like me to dig for specific references.

Orthodox economics of course ignores this.

Economic value is a measure of preferences. If I'd pay a dollar to own a widget instead of the status quo, then the economic value of all the processes that got me that widget is $1.

With that model, saying that economic value is "potentially infinite" is equivalent to saying that there will always be a way to improve someone's life.

In the short term, economic (that is, market exchange) value is determined by psychology. In the long term, economic value is deteŕmined by thermodynamics.

Georgescu-Rogen, Daly, Soddy, Bohm-Bawerk, Marshall, Smith.

Sure.

Imagine if moores law continues going strong, until we have computer's powerful enough to simulate realities. Now anyone can have whatever they want, only limited by computer processing power.

Also, just becuase resources are "finite" doesn't mean we are anywhere close to the limit.

You could just as easily respond by paying "Sure, the universe is finite. Let solve inequality by limiting the amount of resources a person can use to 1 galaxy per person. Nobody needs more resources than an entire galaxy!".

Until we get to that point, we aren't anywhere close to "finite" growth.

You realise "Only limited by computer power" still means "Only limited by available resources"?

A computer isn't a perpetual motion machine. It runs under the laws of physics just as everything else does.

How much energy do you think you would need to truly simulate a galaxy at quantum levels of resolution?

But what if you don't need quantum levels? Then you're into a more subtle argument - confusing an economy of resources with an economy of experiences that can be created using those resources.

It might seem "obvious" how that makes it possible to use less of everything, but if you think it through in detail it really isn't. You still need practical infrastructure, power, and even if everyone is in VR 24/7, you still need nutrients and waste disposal.

You can't start by assuming infinity because Moore's Law, and then pretending it makes all the hard problems go away. It doesn't.

You're right, but it's a moot point for all practical purposes. Of course there is a limit, but if the limit is so high that we'll never reach it, it's as if there's no limit.

The point is, if you can be millions of times more productive with the same quantity of resources, your reserve of economic growth is gigantic. Not truly limitless, of course, but limitless for all intents and purposes.

I wasn't suggesting that we simulate a galaxy. I was suggesting that we capture the entire energy output of a galaxy and give it to one person. And then do that for every person in the world.

There is a lot of energy out there and a lot of technological growth to go before we hit a "finite" limit.

> Therefore, yes, you can have virtually infinite growth of economic value.

I prefer to phrase it as "potentially asymptotically endless growth of economic value". Lording over all of this are the (as far as we currently know) iron laws of thermodynamics. Until the economy is majority fad/fashion-driven and ascribes value literally upon human whimsy, it must derive ground truth value out of those laws, and as far as we know there does not exist an infinite supply of energy. We are a long ways from reaching the asymptote, but even "virtually infinite" will literally cook the planet with an economy using ideal Carnot efficiency-based engines.

> asymptotes

This is brilliantly clarifying, thank you.

That's a good point and I accept your suggestion. But if we are never likely to even see the beginning of the asymptote, we can just treat it as infinite. And people understand "virtually infinite" more than "potentially asymptotically endless" even though you're correct.

> Until the economy is majority fad/fashion-driven and ascribes value literally upon human whimsy, it must derive ground truth value out of those laws.

I would disagree with that, but I'm happy to reconsider if you care to explain more. Economy is based on our preferences, as economic agents. The rationality of our preferences is irrelevant to the economic system. In this way, there is no "ground truth". That's supply and demand, not a cost-driven economy. There is no economy outside of interacting economic agents performing transactions, this is what an economy is.

Whether or not growth in economic value is infinite, no company can grow faster than the overall economy indefinitely, which is what, in theory, determines where investors put their money.

The challenge for twitter is that they were always compared to Facebook and the two, while competing for the same marketing dollars, are delivering different products for different use cases which ultimately means different levels of user numbers and engagement.

Stock markets are speculative, so investors trade on the story and the fundamentals on a sliding scale, in the case of twitter it's fundamentals aren't strong without a road to profit, one that they are also quite far away from, and in terms of story being compared to FB which now has 4x more users and continues to grow doesn't allow it to create a story that investors can rally behind or support it.

Ultimately the main issue with Twitter was lack of leadership and decision making and the failure to acquire Instagram.

If Instagram was a part of Twitter then they would have a secondary social network, that today (although with FB integration) has already outpaced them in terms of user numbers and continues to grow.

That failure is why they are where they are currently. They haven't been able to do a large strategic acquisition that really pushed their company forward and the ones that they have done were mainly add-ons and smaller in comparison that were never able to stand on their own.

Kudos to Mark and Facebook for being decisive and pulling Instagram from out under Twitter, but if Twitter want to get the deal done they should have led with a Billion not $500MM and the deal would have been theirs.

I'll see your Scarface and raise you Johnnie Rocco from Key Largo:

https://m.youtube.com/watch?v=ITs-YX1yQ7o

I think portraying it as a fight to the death is more interesting. This is why any new phone is "an iPhone killer" rather than a phone attempting to get some market share.

Think this is more accurate. Maybe they can't exist post growth because in the social media space we have obvious reference to companies like MySpace and Friendster. Where the slow down of growth happened due to competitors that will chip away users/market share until the product becomes largely irrelevant compared to what it once was. In this situation investors are looking to get out for as good as price as possible.

The challenge is that their market cap (>10mm) demands growth.

People demand growth. Market capitalizations do not demand growth.

It's probable that you're speaking metaphorically here, but your metaphor is abstract enough as to not communicate any meaning. It's clear that you think someone is demanding growth. Who is demanding growth? When you figure that out it will be much clearer to you what's going on here.

To justify the market cap, investors are expecting growth. Unprofitable companies only trade at 7 times revenue when buyers (investors) expect them to grow and eventually become profitable. Otherwise you'd be waiting a long time to get your investment back.

So investors demand growth. But not only that, they demand sevenfold growth. That's much less abstract.

And it's also hilarious and a perfect example of why Twitter is a perfect example of the tech bubble. Twitter is not going to grow in value sevenfold: in ten years they have not even broken even yet.

> Twitter doesn't have to "exit"

Some or much of the noise for that is brought on by major shareholders people who bought in and or have large positions which developed when the stock was much higher.

Exactly, it's a game of hot potato which they hope ends being held by a tech giant.

> They just have to trim down to a profitable and stable level

Assuming such a thing exists. Which it might not; sure, Twitter could stop trying to generate growth and cut a bunch of costs, but there's no guarantee that that wouldn't result in a gradual (or rapid) exit of user time and attention (in general, or just in the advertiser-valued demographics) to other services, as Twitter stopped moving forward while the market kept moving forward.

I could understand your logic if Twitter was a private company, but it's not. Wall Street demands strong quarterly growth and anything else is failure. So Twitter trimming down to a profitable level only means that its stock is going to gradually decline as more and more investors pull out and reinvest their money into other companies that are growing.

The best thing for Twitter is to go back to being a private company and charting their own future and be free of what Wall Street wants them to be.

Not sure if I can agree with this. Let's pick a random well known public company. Nintendo. They've had their ups and downs and hurricanes of bad news etc. but never is 'selling the company' an idea that gets talked about. Instead, the story is 'what should Nintendo do to grow again. Invest more in mobile games?'. Resulting in feedback which the company now is pursuing. Twitter is a well known brand. Less glorious times need to be dealt with professionally. I understand there are people who'd rather make a quick buck. But the ones that should get the credits and praise in the media are those trying to put things back on track again.

If you're not growing, you're in slow-motion liquidation.

Slow motion liquidation usually gets better prices than a fire sale.

Fortunately, Twitter doesn't have one of those "president for life" two-class stock setups like Google and Facebook.

Or News Corp / 21st Century Fox.

I didnt even know all those were owned by one company. That's a trip. I agree Twitter should follow suit to profitably maintain its existing users.

Out of curiosity, do you think that FB & GOOG would be doing better or worse currently if they didn't have a DFL?

Are you sure "fortunately" is the correct word when comparing unfavorably to Facebook and Google?

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