Hacker News Reader

Comment by austenallred | Hacker News Reader

So much pessimism in the comments about the viability of Twitter as a business model. I've heard multiple sources (Chris Sacca, Ron Conway) not only say that Twitter has perhaps the best monetization opportunity of any web 2.0 company but dump as much money as they can into the stock. I've advertised on Twitter for quite a while, and the returns destroy Facebook and Adsense.

Advertising makes a lot of money if the audience is big enough. Twitter's audience is huge, connected, well sorted, and interested.

View on HN

I'm bullish on TWTR(?), and will definitely buy into the company at some point (likely after their first lockup expiration), but I am, for one, not the least bit surprised that two people who have a ton of money on the line say they think Twitter has a solid business model, and that of course you should buy their stock.

I'm really, really hoping its TWIT...

Is # an acceptable character?

Sort of, but only as a suffix, and only for specific types of securities: http://www.nasdaqtrader.com/trader.aspx?id=CQSsymbolconventi...

I think Leo Laporte might have a problem with that.

because he's going to have an IPO soon? and his trademark in anyway can be conflated with twitter's?

TWTTR would be interesting since that was the original name of the service.

I think you're guilty of chicken and egg there though. They put a ton of money on the line based on what they were seeing?

> I've advertised on Twitter for quite a while, and the returns destroy Facebook and Adsense.

Well, go on already... This is far more interesting than the original subject :)

> dump as much money as they can into the stock

They would say that wouldn't they!

Sure, you can look at it as Ron Conway pulling a long con by investing in a stock and lying about its monetization potential. Or you can look at it as Ron Conway putting his money where his mouth is.

That still doesn't mean that it's a wise financial investment.

Exhibit A: The .com bubble

Nobody wants to know if the stock is worth something, they want to know if it is worth the IPO price.

I read an article a few years back about how Twitter could potentially be of great value as a peer-to-peer PSP. It's more of a long shot (and they probably should've started a long time ago) but I did find it an interesting model. I just don't see advertising work at the scale that they'd need to justify a ginormous valuation (just as FB isn't very convincing with their ad network).

http://www.businessinsider.com/2008/6/how-twitter-will-be-wo...

Also, just realized that Square is set to go into this direction.

Can you elaborate about AdWords vs Twitter Ads?

We've advertised on Linked In and Facebook but haven't thought of trying Twitter. Would you mind sharing a bit about what you've advertised on Twitter and the type of results you've experienced?

Thanks!

Advertising makes money when the audience has intent.

People search google for "Best washing machine". Google shows them adverts for washing machines, customer buys washing machine.

Where is the intent on twitter? To gossip? I just don't see it.

If someone is about to buy something, they're likely to go to google and search. They're not likely to go to twitter. Google gets them at the crucial point before they buy something.

"I just bought a #WashingMachine from @SomeWebshop for #cheap, #omg!!111#one~!", where @SomeWebshop paid Twitter to have positive-sounding tweets for SomeWebshop appear more prominently on the #washingmachine hashtag and elsewhere.

(disclaimer: I don't know twitter and never got into it.)

Advertising makes more money when the audience has intent. That's why a google click for someone who is searching for "mesothelioma" costs $130, and why Google makes money faster than it can spend it.

But what if no one is looking for you? What if you are trying to gain new audiences? There's still plenty of money to be made there. Maybe not Google money, but enough to build a company that's worth tens or perhaps eventually hundreds of billions of dollars. Reputable sources (http://www.forbes.com/sites/roberthof/2013/03/27/report-twit...) have Twitter's estimated revenue to be at $1 Billion next year. And the monetization is just getting started.

Secondary to intent, but still pretty valuable, is interest. With Twitter, interest is VERY clear. If you want to target web developers, or fashion lovers, or car enthusiasts, you just have to look at who they follow to figure it out.

One of these companies(FB, twitter, YELP, Goog, etc) is going to rethink and reinvent advertising. All these companies use old models on the web(playing an ad before a video like tv, banner ads are like magazine or classifieds ads).

That's kind of the name of the game. "How can we show people ads in a new way that integrates seamlessly with their experience?"

What if Twitter found a way to do it? Facebook seems to be getting the hang of it with their newsfeed ads.

> "How can we show people ads in a new way that integrates seamlessly with their experience?"

Imho Google does this pretty well with Adwords (those that you see in the search results).

Is this where I can complain about Twitters Ad API still not being available to the general public?

You can build some amazing tools with the APIs Google and Facebook give you, but Twitter is off-limits unless you're an invited partner, of which there are only a handful (I think.)

They seem a little too content to keep it restricted.

And to at least make my missive vaguely related to your post - surely they'd get a lot of interesting ideas on how to revolutionize advertising if they allowed open experimentation.

I think this also shows a somewhat limited understanding of Twitter and solely puts it in the "passive" mode. I'll actively search on Twitter for topics of interest to me to see what people are saying on topics.

> Advertising makes money when the audience has intent.

That's why nobody advertises on television.

When I watch TV, my intent is to see what antics the Simpsons are up to this week, not to go to Best Buy and trade my cellphone in for a newer version or buy a Coke or go to a movie theater an watch a Seth Rogen movie.

> That's why nobody advertises on television.

Companies spent $140 billion in advertising on US TV in 2012, up 3% from 2011. TV is about brand and awareness, not direct response.

He was obviously being sarcastic.

I know. I was supporting his point. Massive industry. Hoping to see more brand dollars shift toward online.

I think the idea that twitter will follow more of a TV strategy than a google strategy is good one. Twitter is obviously a platform ideal for kicking entertaining content at users to keep your brand relevant and with positive affect in their mind.

What's the intent of people watching television or reading newspapers? Ads were a distraction, but people never minded too much. And advertisers were happy, because they got enough people with intent to make it worth their while.

Twitter may not have direct understanding of intent, but they are pretty good at knowing interest, which is sufficiently correlated with intent to make advertisers happy.

Who you follow on twitter shows intent far more than liking a page on Facebook.

Google (or all search engines, i guess, but who are we kidding) is pretty much the only example of the situation you describe. All other advertising that exists, or has existed, doesn't work like that, yet is supposedly successful.

Twitter has a search box too. Many people who use twitter use twitter's search for current events before google's. There are more things that people search for than just what to buy.

But maybe that's what sell ads.

Reply on news.ycombinator.com