The Failure of Twitter
Twitter, a short-message social network, has some striking numbers: millions of users, billions of messages (“Tweets”), a four-year history, and no income source. Yes, that’s four years of so-called development with no source of income – until this week, when they decided advertising would be good for profits. After four years.
There are, or will be, two kinds of advertising on Twitter: promoted Tweets inside search results and promoted Tweets inside users’ streams. Despite what the majority of the Internet is saying at the moment, this type of monetization is far from revolutionary, since they’re essentially replicating Google’s inline advertising strategy. The time it took for them to reach this decision is astounding.
After receiving an accumulated $62 million in funding, the self-promotional, ego-stroking service has decided to actually attempt to be a company, typically defined as a corporate entity independent of outside funding. For almost any other company, being reliant on such massive amounts of external capital would be an exercise in a quick failure, but, for some reason, Twitter has been treated similarly to Facebook, and was subsequently given large, regular checks, irrespective of their lack of an actual business plan.
It is not enough for a programmer or two to have a “good idea” in order to form a successful company – it requires a monetization strategy. Far too many so-called innovations of the modern era follow the “develop now, think later” business strategy, assuming that funding will magically appear in order to save their wishful thinking. This is a direct result of sites like Facebook and Twitter, where everyone believes that they can develop, launch, and run indefinitely their X-meets-Y-with-Z-twist website idea.
Twitter has become obligatory for certain portions of the digital workforce, by brute force, but this does not justify its existence. More importantly, a profit model so dependent upon advertising may not work as well, in the longrun, as Twitter and others may believe – if it works at all. For the moment, Starbucks and others may find promoted and injected Tweets appealing to youngbuck marketers, but the appeal will likely fade as they realize the limited value of inserting short blurbs of nonsense into larger lists of nonsense, simply failing to produce valuable returns.
The blogs who singularly cover the echochamber of web service public relations should be ashamed of themselves for salivating over such an unoriginal, non-innovative business plan – they should know better.
Kyle can be found on his blog, on Facebook, via email, or on Twitter.
Post Your Comment
You must be logged in to post a comment
T/S Members
Log in with your True/Slant account.
Yes, I realize the irony of linking to my Twitter at the end of this piece.
[...] piece adheres to the Code of Ethics subscribe to Self posts: rss – email New column at Technotainment Revelations on True/Slant: Twitter, a short-message social network, has some striking numbers: millions of users, billions [...]
Kyle: Not sure I follow your argument here. Twitter is a “self-promotional, ego-stroking” service… as opposed to other social-media entities (FB, MySpace) that have somehow come into being for the betterment of mankind? If you’re arguing that the platform fosters narcissism, I swear to God I don’t have the energy to fight back on that one anymore. Okay, you win. But if you’re somehow making a jump to an argument that their long-term financial strategy is… what, exactly? “Unoriginal”? “Non-innovative”?… Well, you’ve lost me. It seems pretty clear to me it’s a first step in what will ultimately become a variety of income streams.I don’t love it, but I don’t begrudge them their right to do it. And if their backers have been willing to hang in through the four years it’s taken them to institute this modest first step, why should I care? I’m not being snippy here. I truly don’t understand your beef.
There’s two things in this:
* poking fun at Twitter, because it shouldn’t be as popular as it really is
* that it took them four years to come up with a business plan that every broke tech entrepreneur could suggest the implementation of, and then bragged about how it’s going to change the world – with the tech blogs mostly taking the bait
I’ve always had a problem with the money they’ve received to essentially do nothing for the last four years besides play with hardware, and now that they have a self-proclaimed business plan, it’s time someone gave them the “what for”.
Like I said, the service, the money they’ve received over time, and now the exuberance over their lackluster effort at profits is entirely irrational.
–Kyle
In response to another comment. See in context »Okay, I think I got you now. I’m not seeing exuberance in the reaction to the Promoted Tweets idea, either from inside or outside, but you may have a different read on that. And we disagree over the value of the service, but man oh m,an, I’ve been wrong on stuff like that before. Thanks for clarifying.
In response to another comment. See in context »No problem – we’ll see what happens
–Kyle
In response to another comment. See in context »Kyle, I know you don’t think that these are effective Business strategies but you have to consider that these businesses don’t market conventional goods. They provide an instant gratification, ego stoking service.
Much like drugs.
From that standpoint, their non-business business-plan makes complete sense. A drug dealer gives it’s customers free hits initially because he understands how his business works. He doesn’t make money from one time customers; he wants repeat business. So you get the customers hooked initially without concern for losses (its a business investment). Then once they are in, you can charge the addicts whatever you want because they can’t imagine their life without the drug. Replace drugs with twitter and you have a business plan.
Admittedly, Twitter could be doing more to screw their patrons out of money, but I like this as a slow rolling plan. Devious.
In response to another comment. See in context »Fitch,
I don’t really disagree that this is really their only option to monetization, but I find it laughable that it took four years to come to this conclusion and its implementation – at which point they want to proclaim it as revolutionary.
If there were other ways to monetize an essentially free service, I would have suggested them in this piece, but other than having tiered accounts, it’s not a viable option.
–Kyle
In response to another comment. See in context »[...] course the skeptics have their own voice, and others like Loic Le Meur have already taken measures to ensure their [...]
Twitter’s main value seems to be that it gives people something to do, which is not really a bad thing at all, but as an aspiring developer, I so pay attention to those business classes! For sure, we need both skills today, business and tech! I actually had a young friend tell me “I am not polluting my mind with no business courses”, and while I laughed, I did feel a little sorry for him, thanks!
[...] The Failure of Twitter – True/Slant [...]