You're either mighty brave or mighty stupid. So which is it, Twitter? Cash-strapped microblogging website Twitter filed for its initial public offering late yesterday, revealing a huge battle ahead for the company to convince investors it's not just another corporate flash in the pan. As it began prepping for its Wall Street debut, the Dick Costolo-run outfit finally addressed its lack of a …
Most web "phenomena" last a few years. They grow and grow, become the darling of the online press - then the wind changes and all their users desert them (sometimes helped by unpopular changes, managerial incompetence or the next "big thing" being bigger and thingier than they are). Twitter has had a good run and round about now you'd expect it to start sliding as the next generation of internet users dismiss Twitter as being "for old people".
So why go for an IPO? Possibly to staunch the slide. Buy up the competiton, or expand by aquisiton - or maybe just to cash out while there's still some money in Twitter as a going concern.
Either way, given the current climate there's no good time to float (or sink), but on the presumption that the financial situation won't be getting any better for some time, and that Twitter's shelf-life could be coming to the end, this would seem like a good time for them. Whether it's a good time for investors? No-one can say.
'Whether it's a good time for investors? No-one can say.'
You just did. If your analysis is right (and it looks spot on to me) then investors who pay anything like the valuation mooted will get badly burnt.
I wouldn't be surprised to see Twitter bought by one of the existing social media brands to widen their dominance but I don't see that the revenue they'll generate independently will make them reliably profitable, let alone profitable enough to justify a multi $bn valuation.
When Facebook went public they didn't need the money. They had plenty of cash on hand, and were turning a profit. So they only sold a bit, keeping total control for Zuckerberg, but making loadsamoney. Quite why there was such enthusiasm for the sale at so stupidly high a price is anyone's guess. But revenues keep growing, and who knows? Maybe they'll grow into the stupid valuation. Or fall over in a few years' time, due to arrogance and incompetence.
But Twitter do need the money. They're buying an ad-broker, making losses, and if they want to make more advertising sales overseas, they're going to need to get more staff to handle that. Plus R&D and (worryingly), needing to retain staff. Which rather sounds like, paying massive bonuses to retain people who can no longer be bribed with the thought of the upcoming IPO gravy-train. Even though those people aren't exactly pulling in the profits. So the difference with Facebook is that they need to sell more than a paltry 10% of the company - and that means letting the money men into bed (or at least, the boardroom).
Still, if Facebook is worth $100bn, Skype $7bn and Autonomy $10, then why shouldn't Twitter be worth another $10bn? On which note, I've an excellent bridge for sale, only one careful owner - and I'm willing to sell it for the amazing, knock-down price of $1bn...
Quite. Only a moron would pay $10bn for Twitter - if you had that much, didn't want to lose it but still insisted on spending it on tech shares, would you buy Twitter, 5% of Google, or use it to fund 100 new companies? - so why not ask the morons for more? You already know they're morons.
How much did it cost them to move into that old renovated relic building on Market Street? Lotsa foot traffic in and out of if. Must be a significant headcount, rent/lease cost, and a load of cash spent on perks to attract or retain some employees. Others are probably quivering in their boots hoping they'll pull a rabbit out of a hat.
Time will tell. Sitting on top of two major transit rail lines (BART and MUNI), numerous bus lines (MUNI, Amtrak, various other commuter buses), near two Starbucks, a McDonalds, a BK, Carls, City Hall, and a plethora of other services cannot be cheap.
Meanwhile, what's happening with Zynga? They're way back south, in the Potrero Hill area, possibly meaningfully cheaper digs, tho it's in the Design Center district, which probably has some heft in the real estate costs, too, but probably not as crazy as downtown. If the $300 per head on payrol tax deferral was a significant lure to get Twitter to move into a new housing corridor of Market Street... Well, we'll see how mnay of these companies really ARE quietly sinking cash and other resources into buying up apartments to keep their employees within walking distance of their offices. May be a rumor, but I heard from a kstreet person who seems to be keeping an eye on things say that Twitter, Google, and multiple others are buying up chunks or blocks of floors of apartments in new construction towers. If true, then the poorer of these companies had better start turning significant profits before they begin a new real estate boom and soon-thereafter bust/crash from renewed "irrational exuberance" and wreck things all over before a recovery cycle has made its run.
Like Facebook it's a proprietary substitute for real Internet applications and websites. Overhyped by media such as BBC and some papers.
Good riddance if crashes and burns.
Facebook and Twitter add no value for people and shamelessly exploit them. Probably make more sense for both to be part of Yahoo or something, if we have to continue to put up with them polluting Radio, TV, papers and Websites.
"Facebook and Twitter add no value for people and shamelessly exploit them"
What typical complete and utter pish from the IT snoot brigade; fair enough, users are exploited (in the same way every company "exploits" their customers/users*) but to say that they add no value to anyone is to completely fly in the face of the vast majority of the evidence. Whilst you no doubt get a huge amount of satisfaction from programming your Raspberry Pi to make a couple of LEDs flash, other people obtain the same levels from communicating with others via social media sites. Twats like you with gobshite opinions like that are why us IT professionals are derided in the mainstream.
* yes, yes, I know, the advertisers are the customers yawn
A new, improved, redesigned logo with an appropriately indented ! usually does wonders to turn around ailing dinosaurs with no real revenue or even visitors for that matter into exciting hangouts for yuppies.
At least #twttr has 215 mln users, as per its own estimates ; which must be true. Yahoo! needs them users after all to at least see their redesigned logo.
Btw, sad to see a company that until recently toppled a series of middle eastern govts via twattathons; come down with open arms asking for money from Wall St. types. So much for #VivaLaRevolucion.
Am off to browsing through #NudePhotoRevolutionary for inspiration.
How does anyone expect to make make money out of this? Its free. Its never made a profit. It got debts of half a billion dollars. Its revenue it some tens of millions per year. Its fine as long as its free but no one is going to pay to use it. Its just glorified text messaging. I dont use it but I get that people like it. Maybe get mobile carriers to Sell tweets similar to texts (I.e. get 500 tweets per month for 5 quid or something?) If it goes public its fucked but the guys who set it up make a mint. Good exit strategy for them. Its It's probably all they care about (justifiably) but would I buy the stock? Nah thanks. I hope to buggery my pension pot doesnt buy any either.
What’s the point? It’s just too easy now to siphon off users from a Twitter screen onto a third party store. Who’s going to buy via Twitter when they can get it on Amazon or iTunes or anywhere they like in one click (or swipe, as doubtless will be)?
What's up on thebutton.net means they're going to have to make their users pay. But that will work. What are they going to do, those addicts, stop tweeting, just let those 'thoughts' ride? Simultaneously migrate to one and the same free alternative? Jaysus, some of them would pay premium rate phone rates.
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