
Twitter: It is too late for it to become the giant people expected - noir-york
http://www.economist.com/news/business/21707258-it-too-late-social-media-firm-become-giant-people-once-expected-twitter
======
dasil003
There's something so sad to me about the general tech press attitude (let
alone the Wall Street attitude) towards Twitter.

Twitter is forever judged by Facebook's bar, using Facebook's KPIs. Nevermind
that the average high profile tweet is much more culturally significant than
the averge high profile Facebook post. Heck most of Facebook isn't even
original content, it's just really slick distribution for content from
elsewhere.

Obviously Facebook has cracked engagement in a way that Twitter never has and
never will. _But_ , Twitter has cracked public discourse in a way that no
other company has period. Think about it, all previous internet fora have
imploded as they've grown large, or collapsed into micro-communities like sub-
reddits. Twitter has definitely faced challenges with trolling and witch-
hunts, etc, but by and large they've put together a super interesting product.
The only problem is that it's not going to displace Facebook because it's a
different thing that's not quite as big. This demand for growth is also why
Twitter's management took their eye off the ball and failed to recognize and
improve the core problems that hurt the product and community. It's just a
really sad statement on modern business culture that Twitter isn't allowed to
be considered a success as a medium-sized company that punches way above its
weight among influencers.

~~~
rm999
You're addressing like 10% of the article. The article lays out tons of
issues, including:

1\. Shrinking product - this isn't about comparing to facebook, it's about
comparing to 2015 twitter.

2\. Unhappy employees - especially high turnover at the top, which is
universally a bad sign.

3\. Unhappy users - users spending way less time on twitter.

4\. Unhappy investors - stock price is wayyy down.

5\. Happy competitors - a lot of the "cultural significance" is moving to
instagram, snapchat, and others.

Twitter isn't a successful medium sized company, it's a large company that is
in trouble. Maybe it will become a successful medium sized company one day,
but that process will be painful for a lot of people.

~~~
pmontra
It's not so bad to survive as a service for news and press releases. You can't
do that very well on Instagram and definitely not on Snapchat. It means
Twitter is going to shrink (points 1 to 4) but it will keep paying salaries.
Not world domination but still a success.

~~~
AJ007
They are losing money, so may be not.

Both pieces of their business model, advertising and users, strongly benefit
or hurt because of network effects. As the network shrinks, the value does not
drop linearly. This is an assault from both sides. Because Twitter's growth is
now definitely flat and likely is shrinking this is pretty bad.

While you can't do X or Y on Instagram or Snapchat now doesn't mean you won't
in the future. Clearly both took a big chunk of Twitter's users. Tweeting
pictures was previously a large use case. So was tweeting and sharing things
with friends. That you can create a video of what happened rather than typing
it out isn't necessarily a different product or use case.

In terms of news - FB, Google, Apple are all going after that market hard
right now. The mass use case for Twitter probably made this sub use case look
bigger than it was - news and instant events. Things could still change, but
it is hard to see Twitter out-innovating their problems when they no longer
have the social tail winds pushing them forward. And at some point the cash is
going to matter a lot too.

Does it make a lot of sense for someone with a lot of users to buy Twitter and
try to revamp it? Plausibly, but the brand damage definitely has been done
with the growth demographics. That is kind of the mistake Myspace's acquirers
have made. At some point a brand goes from valuable to doing just the
opposite.

I bought Twitter shares and ended up selling them all once this settled in.
There still probably is a threshold where an executive that is looking for
value vs growth tries to acquire and you can arbitrage the difference.

Unfortunately the bulk of Twitter's remaining value is probably going to be
realized by there competitors as a case study for the survivors - FB/IG,
Snapchat, and future players.

~~~
duaneb
None of Google, Apple, and FB have any public discourse worth reading, or even
readable conversation threads at all. You're comparing apples and oranges.

~~~
glenstein
I wonder if a Google acquisition would be a natural step forward? It would
tidily wrap up this tumultuous chapter in Twitter's history. And it would
finally, at long last give Google something approximating a legitimate social
network.

------
rsp1984
This is probably an unpopular opinion and for certain I lack the qualification
to run a public company of about 4000 people and hence to make snarky comments
on the internet.

However it's my common sense that tells me there's something going _very_
wrong with Twitter: let's be honest, their product is a message server with a
fancy website wrapped around it and an attached ad-business. There's
absolutely _NO WAY_ it takes 4000 employees to run this thing! For comparison
Whatsapp had ~ 60 employees when it was bought by FB and Instagram had 13. And
I'd venture to say that both of these companies had more data to manage than
Twitter has now.

 _Because he is often working at Square, many managers arrive late, depart
early and generally show up just to “punch the time card”, says one former
senior executive who has sold all of his shares._

And my common sense tells me it's probably not just the managers but also
about 90% of the engineers. I don't mean to be derogatory towards Twitter
employees but I truly wonder what everybody at this company is doing all day.
The product is not improving in any meaningful way. The few innovations that
they launched were all acquired businesses.

Twitters quarterly expenses are now around 700 million. Let me make a very
conservative estimate: It would probably not take more than 100 million per
quarter to run the business (including their ad business). Likely much less.
Their revenue is 600 million per quarter. If Twitter were a properly run
company they could be making half a billion per quarter in profit which they
could use to explore new business opportunities, products, or if there's a
total lack of ideas, pay out to shareholders. I'd argue that any of these
options would be a whole lot better than the status right now.

~~~
capitalsigma
I think it's actually pretty hard to maintain Twitter's infrastructure; the
amount of data is huge and the latency requirements are tight.

~~~
beagle3
There's a difference between $2.5B/year hard, and $500M/year hard, and between
those and $50M/hard.

The front end (tight "amount of data and latency requirements") are probably
doable on $50M/year, as WhatsApp was doing something comparable on much less
than that.

I know where some of the money went - tens of projects like Bootstrap, which
have benefited the community at large, but whose value to twitter is probably
not on par with the costs. But that still does not explain even a small
fraction of where the money goes.

~~~
kkarakk
to be fair, an issue with whatsapp is fundamentally inward facing. lose a
couple of old messages? you're on the free tier, what do you want? twitter on
the other hand - a publicly liked and massively supported tweet/twitter
account disappears or starts having malfunctions and the whole service is
maligned. "free speech is being threatened" etc etc twitter has been used for
mass protests/revolutions because of it's reach and stability. do you think
whatsapp would have done the same? they were still transmitting plain text
between users and it was trivially easy to view someone else's texts for quite
some time

~~~
beagle3
I disagree. There are whatsapp groups of hundreds of members, some used for
political action. If they indeed lose messages, people notice.

I'm not sure why you bring up plaintext (it is irrelevant, regardless of
Twitter still being plaintext itself).

Engineering wise, the user-visible side of Twitter is more or less as complex
as the user visible side of whatsapp. Both can be done on very modest hardware
with modest operations if they are properly done. Whatsapp was lean (and
probably still is). Twitter never was.

~~~
kkarakk
apologies i brought up plaintext as an example of a thing messaging clients
should fundamentally not do but whatsapp never got around to fixing until it
became a real issue for them, hell p2p encryption was only done this year

------
rrggrr
Maddening how incompetent Twitter is at strategic thought. They have arguably
the most politically and civically important property on the internet but wish
they were Facebook.

Twitter is a Bentley in a market that wrongly thinks it should be Honda. The
value of a network is as much the value of its participants as it is size.
__There is nothing wrong with Twitter, quite the opposite __

Twitter 's key users are making, reporting and breaking news. The second and
third order effects of this are enormous, far surpassing Facebook.

The perceived monetization "problem" is painfully and frustratingly easy to
rectify if Twitter would simply embrace their role and stop trying to compete
in the social media gutter.

Uuuuugh....

~~~
streblo
> The perceived monetization "problem" is painfully and frustratingly easy to
> rectify if Twitter would simply embrace their role and stop trying to
> compete in the social media gutter.

I'd love to hear you expand on that point

~~~
rrggrr
Okay, expanding... revenue currently based on broadcast value alone. No value
is being extracted from communications loops, redirected communications,
related content, drill downs, prioritized versions of the aforementioned
items, filters (including location-based filters) or monetized karma (eg.
Reddit gold). All of these can be accomplished without polluting the UI or
purity of the tweet. Additionally, the highest value network members have got
to be cultivated, incentivized for tweets, interaction with other network
members and tolerating the occasional flame. A mesh networked solution should
be in the works with a moderation-bridged pipeline to the conventional
twitterverse.

------
electic
The problem with Twitter is that the demolished their developer ecosystem. The
attacked the very developers and companies that taught people how to use
Twitter and developed solutions that made it a viable use case. Without those
myriad of solutions built upon it, Twitter is a very basic SMS broadcast
medium. It has a sloppy unsegmented home feed full of noise and its mechanics
are horrible so it does a poor job of burying hate.

With that in mind, the numbers show. The people that get it are on it. Most of
the rest of us just see glimmers of it embedded in news articles. Sadly, it is
too late to reverse this. Trust has been lost.

~~~
nateberkopec
Twitter had to kill their ecosystem in order to make any money on advertising.
There was just no way to sell ads if so many users were going to be using 3rd
party clients.

You may be right that killing off the 3rd party ecosystem hurt their usage,
but from a business perspective, there wasn't any point keeping it if it was
damaging their business model.

~~~
BinaryIdiot
Not really. The vast majority of their ads are in the timeline. I don't see
why they couldn't just serve those to third party developers. If the third
parties try to block or prevent them then you revoke their API keys. Done.

~~~
MaxfordAndSons
I dunno, I think to do that they'd have to have an Apple App Store level of
oversight on their third party devs products, which would be about as
restrictive to the devs as the changes they actually did make, plus
prohibitively expensive for Twitter.

~~~
lnanek2
That's not true at all. As someone who had multiple Twitter API apps killed by
them, I would have welcome app store level review processes. Limiting tokens
(killing any popular app) and killing games that let you tweet easily because
they are too much like general purpose clients like they did was just
ridiculous. The best apps I know, like Foursquare, just switched back to
asking users for username and password at the time because the token
limitation basically broke integration.

------
overcast
I believe the problem with Twitter, as it's always been, is that it's just too
polarizing. Either people get it, or they don't. It's not general enough, the
mechanics of hash tags, nonsensical short messages, retweeting, the signal to
noise ratio is horrible, coupled with an often confusing interface, don't
allow for the second half of the adoption curve to ever happen. For such a
simple mechanic, they make it difficult for a lot of people to just "get it".

I've got multiple accounts for various projects, my own personal account, and
I still don't see the value in it for me personally.

~~~
city41
For those that do "get" twitter, can you tell why it's useful? I've been on
twitter for about 5 years now. I go through phases where I visit just about
every day, and tweet a decent amount, trying to find the worth. And I can
honestly say I see almost no value at all. I'm really trying hard to cross
into the "get" category, and it just isn't happening. Lately I've been
considering closing my account and being done with it.

The signal/noise ratio is _horrific_ , and the insistence on 140 characters is
far more aggravating and frustrating than anything. Nowadays I see people
dividing their thoughts into 8+ tweets (prefacing each with 1/8, 2/8, etc) and
I just shake my head.

~~~
snowwrestler
Nothing on the Internet delivers news faster than Twitter. Every other
platform is either too slow (websites with CMS's and editors), or too filtered
(Facebook or chat apps, on which posts are private by default).

If you want to know what's happening _right now,_ Twitter will give you better
results than anything else, including a Google search. Tweets famously beat an
earthquake from Virginia to New York, fulfilling an XKCD joke. And it's almost
all searchable by the public in real time.

So that's one thing: it's a close as you're going to get to a real-time tap in
the zeitgeist.

Another use is comedy; you get everything from corny puns and "dad jokes," to
multi-year character humor arcs, to biting political humor, all in one place,
as fast as you want it.

Another is the ability to drill down into a wide variety of subcultures.
Various niches within politics, programming, sports, finance, etc. all have
robust conversations going on constantly, and many of them internationally.

Candidly, it took a long time for me to get Twitter. Ultimately for me the
secret was to follow a bunch of folks I might like, see what they said,
unfollow the ones I didn't like, and then follow the folks who the others (the
ones I kept) retweeted.

I spend more time on Twitter now than any other social network or app. And I
only really started "gettting it" a year or two ago.

~~~
kkarakk
this is pretty spot on, for people who like being "in the know" twitter is
like your favorite publicly available and easy find-able crack "oh hey what is
that guy from the scrubs tv show doing nowadays" "he just tweeted about a
charity/podcast thing he's doing tomorrow we should check it out" as much as
snapchat/facebook etc are "innovating" with their live video and infinitely
desirable ephemeral messaging, twitter remains the way to get info right now
without having to dig too deep into a social graph

------
brian-armstrong
Twitter makes me think of a public good on the internet. It's fun to imagine
it being funded by tax dollars instead of investment money, with no ads
whatsoever and 1/20th of its staff size. The priorities would have to be
different entirely, but I think it would be for the better.

Actually, I can imagine a few internet properties that might make more sense
to be run like this. Some things just don't really make sense when you try to
do them for profit.

~~~
marssaxman
It should have been an open protocol all along, like email or netnews.

~~~
brian-armstrong
I'm curious, do the federated twitter clone protocols scale? Has anyone tested
them at twitter peak loads?

------
chollida1
Twitter is a really strange company.

I find so much value in it, mostly in the form of tweet deck with multiple
columns giving me real time "news" on multiple different subjects/companies.

Yet, I don't pay for it and I can't see why anyone would pay for it.
Advertising doesn't seem like a viable business model as I have yet to see any
add that is of any value what so ever from the main site.

Can anyone make the case that within 2 years Twitter isn't owned by one of
Google, Microsoft, or Facebook? With Steve Balmer's large investment Microsoft
seems like the leader here.

Or one of the big media companies, though I like this idea less as I can't see
them wanting to subsidies the company forever.

I mean what is Twitter's business model?

Can they really make a go of advertising?

I mean they've done prety well so far but IMHO I wouldn't be surprised that
the ad money they've made so far is from people who feel like they need to
advertise on Google and Facebook and Twitter. And once they get a few year of
data to show which ads are actually helping, the twitter ad money is the first
to be yanked.

Do the go the financial markets model and sell their data/firehose? Does that
generate anywhere near the amount they'd need?

If/when the advertising dollars go away, what does Twitter do? Or is Twitter
banking on being able to compete directly with Facebook and Google for ad
dollars as an equal?

~~~
Retric
Twitter can sell high speed access to all tweets, and their costs should be
really low. Long term it could be a midsize, but profitable company as long as
they don't get into debt.

~~~
niftich
They already do this [1]. They used to sell this access to 'value-add' data
analytics resellers as well, but in 2015 they acquired one instead [2] and
stopped reselling it [3].

[1]
[https://dev.twitter.com/streaming/firehose](https://dev.twitter.com/streaming/firehose)
[2] [https://blog.gnip.com/twitter-data-
ecosystem/](https://blog.gnip.com/twitter-data-ecosystem/) [3]
[http://thenextweb.com/dd/2015/04/11/twitter-cuts-off-
firehos...](http://thenextweb.com/dd/2015/04/11/twitter-cuts-off-firehose-
resellers-as-it-brings-data-access-fully-in-house/)

------
seanca
Twitter is really only useful for following influencers, famous public
figures, popular people, however you'd like to describe them. There isn't that
much of a reason for a more normal user with a few hundred followers (maybe)
to engage on it other than interact with more prominent users. Everything
people go to Twitter for therefore can be done without having an actual
account yourself; everything is public, so why have an account other than to
curate a list of things prominent users say.

Which might not even be a bad model if you think about it. To have it be the
premier "find out what they said" space, without the hoopla from idiots,
trolls, etc. Would people pay to visit a site like that? I'm not sure. Would
there be a way to monetize that sort of experience? I think so. Just my $0.02.

~~~
Nav_Panel
> There isn't that much of a reason for a more normal user with a few hundred
> followers (maybe) to engage on it other than interact with more prominent
> users

I think you've misjudged the value of Twitter for a normal user.

In my experience as one of these "normal" users, Twitter's major use case is
like Facebook before the "adults" (older people) and extended family showed
up. You can type out whatever you want, and your Twitter buddies will see it
(often a different circle than your Facebook friends).

Because messages are so short, interaction is much easier. Discussions take
place in 140 characters rather than paragraphs. Sure, it's less deep than
Facebook, but it's also satisfyingly immediate.

It's also a lot more possible to make new friends over Twitter than Facebook.
It's relatively normal to interact with people you've never met before,
whereas on FB that'd be a big faux pas outside of a post in a common-interest
group.

All the brand stuff? Powerful users and influence and news? Not super relevant
for a pretty decent swath of users (although it is pretty funny when I
subtweet a utilities company or something when I'm having an issue and they
send me an official DM). I personally do not follow any major brands or
celebrities, although occasionally I see them through retweets.

~~~
niftich
> _Twitter 's major use case is like Facebook before the "adults" (older
> people) and extended family showed up. You can type out whatever you want,
> and your Twitter buddies will see it_

I'm in the twentysomething, white demographic, and in my circle of friends we
used Twitter in such a way around ~2009-2011. But we've all moved on to
Tumblr, Instagram, and then Snapchat.

Tumblr has better discoverability of people whose content you may legitimately
enjoy, and endless reblogging is encouraged and not a faux-pas, which is a
great way to fill your "timeline" when you have nothing to say, or a great way
to counterbalance personal posts that all implicitly solicit your friends'
attention (however briefly).

Instagram flips the 'attachment' and the 'tweet' into 'image' and 'caption',
and people like visuals. The image either provides aesthetic gratification on
its own, or it's a social icebreaker used to carry the content in its caption.
Snapchat is used the same way, with the added benefit that Snapchat is private
one-on-one by default, friends-only on demand, whereas Instagram makes your
entire timeline public or friends-only per your choice.

Between these three services and the ever-present Facebook, the need for
Twitter is not so great -- since we've subsumed every other usecase in a
service that does it better, all that we use Twitter for is to broadcast stuff
pseudonymously to the entire world, hoping it garners some likes. It usually
doesn't. It's not particularly fun to shout into the ether; so Twitter doesn't
even do that function well.

~~~
Nav_Panel
I think we have different use cases, despite being in the same demographic.

You speak of using Twitter "in [your] circle of friends", but I'd say about
half of my "Twitter friends" (mutuals who I regularly interact with) aren't
within my "friend circle." My high school circle keeps in touch with an FB
group chat, and the occasional Snapchat. My college circle keeps in touch with
some FB and Instagram posting. Twitter is a different beast.

 _> Tumblr has better discoverability of people whose content you may
legitimately enjoy, and endless reblogging is encouraged and not a faux-pas,
which is a great way to fill your "timeline" when you have nothing to say, or
a great way to counterbalance personal posts that all implicitly solicit your
friends' attention (however briefly)._

For me, this is a negative. I don't WANT endless reblogging filling up my
page. I like seeing content created by the people I follow, even if it's all
personal posts, which I often enjoy more than other sorts of content.

Twitter also has a real-time aspect that Tumblr does not. Many people use
queues on Tumblr, which, to me, would completely defeat the purpose of having
a "feed." Just let me browse individuals' queues at my own leisure.

 _> Instagram flips the 'attachment' and the 'tweet' into 'image' and
'caption', and people like visuals. The image either provides aesthetic
gratification on its own, or it's a social icebreaker used to carry the
content in its caption_

I very rarely see people having actual conversation on Instagram. I enjoy
seeing the content, but I doubt that I'd ever meet someone completely new over
Instagram unless I had an OC art/photography/etc account.

 _> Snapchat is used the same way_

I don't think that's true either. Instagram seems to be carefully considered
and orchestrated photos, while Snapchat is quick, low quality and one-off.
It's a conversational way of using images (which is clever), but it also
requires more investment for each conversation.

 _> It's not particularly fun to shout into the ether; so Twitter doesn't even
do that function well._

This is my main point of disagreement. I personally DO find it fun (or at
least cathartic) to shout into the ether, when that ether is a loosely
anonymous group of quasi-friends (with a couple actual friends tossed in there
too). No other service provides this.

I also like seeing the raw, real-time stream-of-thought posts. Facebook and
Instagram are too curated, Tumblr is too rebloggy and non-real-time, and
Snapchat is too personal/one-on-one.

Anyway, hope this justification makes sense. Obviously if you don't see a use
case for it, you're not under obligation to use it. I wouldn't use it either
if I had a really solid local social circle, but in lieu of constant online
interaction with actual friends, Twitter works well enough.

------
agentgt
I have always felt Twitter could do a better job doing recommendations. Sort
of help me find things I like better. Not just content. I have really started
to like Four Square automatically giving me tips when I walk into places. It
seems like Twitter should know more about what I like/dislike perhaps even
more than Facebook, Amazon, and Google considering I have actively told it so.

Going back to Four Square... Twitter also really doesn't leverage geo. Why the
hell doesn't it show me tweets near me in real time? That would be pretty damn
useful. It could be the event engine. I can't tell you how many times some
body says to me "I have this great idea for startup that shows you cool things
happening right near you" ... and yet twitter could have this now.

~~~
vidarh
I run a twitter feed with tweets about my local area, and gave up on using
their geo stuff entirely to find relevant content... It's quite ridiculous.

------
macandcheese
Streaming live events with partnerships can be big for them. They streamed the
NFL Thursday Night Football game last night and quality was impeccable (aside
from my Bills getting the L). Much better experience IMO than Facebook's
attempts at streaming sports.

------
zeveb
I think the core problem is that Twitter should be a protocol, not a company.
There's just no need for there to be any servers: users could send messages to
one another, each running his own agents.

Since the Twitter experience doesn't _need_ the Twitter corporation, there's
always going to be friction and centrifugal force.

~~~
jbpetersen
Even as a protocol, there'd still need to be some means of governing the
distribution, storage, and retrieval of tweets. A simple P2P network would
make it much harder to gain a foothold when nobody is mirroring your content.

I think Twitter the corporation could make a viable business of filling that
role by selling access to infrastructure for the protocol to developers of
end-user applications and various data hounds.

------
adotjdotr
All sorts of very mis guided comments below. Here are some points:

1/ Im an advertiser I can tell you that big brands still love the platform
(and spend heavily) 2/ Revenue is $2bn+ a year, how is this not successful? 3/
Balance sheet has $1bn+ 4/ NFL deal is huge, ditto bloomberg streaming 5/
Product needs to ship much quicker than Facebook does to stay relevant 6/ It
is the only place that has nailed real time properly, if there is a bomb in a
major city you will hear it first on twitter no where else has this edge,
nowhere 7/ The worlds most important people are on this platform and readily
accessible in most cases, not true on FB in terms of accessibility 8/ 80%
Gross Margin business 9/ Needs to stay independent and ramp up advertising
spend once logged out tweets ad product rolls out 10/ True reach of Twitter is
almost 1bn users when we consider tweets appearing on TV, off the platform, in
newspapers etc. This is comparable to FB

Some of the ignorant stuff people are saying about all the employees is
disrespectful.

WhatsApp and IG when they were acquired were making very little money, if they
had stayed independent and no one acquired them they would not be running
today (they would exhaust the capital chain). WhatsApp maybe was making £10ml
a year but was losing money; IG was making £0. I can tell you with certainty
if they were independent and around today the growth would be stalling and
there is a high chance they would not be able to continue raising venture
money, it is very easy to grow products to 1bn users when you add FB growth's
team which is best in class to an already solid product.

Twitter has been generating solid revenue from around 2009/10 (someone correct
me if im off here) and big brands love it and there is lots of data I have
seen to support the value to advertisers around the world.

Twitter does however need to tell its story a lot better afterall a Tweet
means many different things to many people, its just not as easy to
communicate as Facebook to an outside but this doesn't mean it is not valuable
or should not exist independently.

~~~
jasode
_> 2/ Revenue is $2bn+ a year, how is this not successful?_

It's not successful because their expenses are $2.6 billion a year which
_exceeds_ the revenue of $2.2 billion collected.[1]

This means they lost $450 million. They have no profits. They've _never_ had a
profitable year. In short, if you spend more than you make, you're not
financially successful.

Why do many people think companies like Twitter and Spotify (also $2 billion
revenue and still losing money) are _" successful"_ ?!? I'm guessing the
confusion happens because observers don't understand the difference between
_revenue and profit_.

[1][https://www.google.com/finance?q=NYSE:TWTR&fstype=ii](https://www.google.com/finance?q=NYSE:TWTR&fstype=ii)

~~~
nickpsecurity
Is there a breakdown somewhere of where those costs are coming from and what
they can probably knock out to hit profitable? It's only a few, hundred
million over revenue. I mean, that's a big problem but I've seen rebounds from
worse when better management came along.

------
noir-york
Real-world friends are the basis for your FBK graph, work colleagues are the
basis for Linkedin. But Twitter? What's the community?

Regarding monetization: Twitter creates a lot of value - but its hard to
monetize because the value is primarily positive externalities. News media
benefits by publishing news on twitter, celebs reach their fans, politicians
use it as a campaign tool. And Twitter makes very little from all this.

The irony: while telcos are fighting hard to avoid becoming commoditized dumb
pipes; Twitter _by design_ are a dumb pipe ferrying tweets.

~~~
huherto
> Real-world friends are the basis for your FBK graph, work colleagues are the
> basis for Linkedin. But Twitter? What's the community?

Your political network ? Fans network ?

In which case, it is most useful for celebrities or wannabes but not for
regular people.

~~~
noir-york
Indeed. If twitter is for news, then the people who create the "news" \-
politicians, celebs, artists, journos - are the foundation of the network.

Most of us live mundane lives and while events in our lives may be news to
friends (marriage/births/etc) there is already a network to share that kinda
news: fbk.

------
niftich
Twitter, deep down, has the exact same problem as Blogger or Reddit or
Livejournal or Tumblr. It's ultimately a community where people post text
posts. This is notoriously hard to monetize. But it has another big problem
that doesn't manifest as strongly in those platforms: the pressure of
virality.

Twitter has managed to attract quite a number of VIPs, 'influencers' who draw
followers to them and generate traffic and interest and engagement. These are
your celebrities, your media personalities, industry and academia people who
are very important in their fields -- people who either have a Wikipedia
article, or a blog, or a Youtube channel. These are the people who buoy
Twitter, so these are the people who were most likely to get a Verified mark.
Being on Twitter allows you to feel close to them, like their posts, reblog
them on your feed, so you can project to your friends that you like this
person and feel an affinity to what they do. These influencers also provide a
natural place for promoted content, which has so far been under-utilized.

But somehow, Twitter has been saddled with the misconception that anyone can
be famous with just a single tweet -- it's true that this can happen because
it happened multiple times before, but when people join with the expectation
that this may be the case, everyone loses. Maybe it's in analogue with
Instagram, where if you post a Really Attractive selfie or take an incredible
photograph, you may indeed accumulate a bunch of likes; but this aspiration
doesn't translate nearly as well to quick-reply threads branching off of some
influencer's post, which is the only way for an average person to attain
enough eyeballs to have a shot at their post going viral.

This creates an incentive structure where no one truly wins:

\- Influencers have attract a lot of traffic, but a lot of it is people trying
to be clever

\- Low-activity people -- the long tail of Twitter -- are either unaware of
what's going on, or are caught up in the post flurry

\- The leftover group is people aggressively looking for their 15 minutes of
fame

This also explains the myriad articles about people who "don't get Twitter"
\-- they join and expect to accumulate followers naturally, despite not being
notable on their own right or offering exceptional content. Sorry, you've been
misled. Twitter will amplify your social reach, but it won't create one for
you.

------
johan_larson
I don't get why the board OKed having a part-time CEO. It just seems like a
bizarre thing to do. Was there really no credible candidate who was willing to
run Twitter full time?

~~~
redditmigrant
Twitter at its most basic has a product problem and not a revenue or sales
problem. I think for product problems founders have a unique perspective and
legitimacy to make tough decisions. My guess is that the need for this founder
perspective coupled with the fact that Jack was the only founder who was even
partially available led to the decision of having him on as part time CEO.

~~~
poshli
being the CEO of even a small firm is a 150 percent time job.

I still find it hard to believe the Twitter board couldn't find anyone who
didn't already have a job.

~~~
odbol_
Yeah it's a pretty bad sign for your company when even the founder is like
"this kinda sucks, I'm going to a better company that actually makes money."

------
talideon
Any way to fix the title? The 'the' after 'for' looks like it ought to have
come after 'become'.

~~~
noir-york
Apologies for the oversight! Cannot find a way to edit the title. Pointers
welcome

~~~
talideon
It appears to have been fixed, so hurray!

------
raverbashing
OK, here goes.

Twitter was _Great_. Yes, with a captial G. In 2008/9 up until, let's say,
2012 (or even 14)?

It got a lot of early adopters, it got groups together on it (real groups,
people that meet in real life), it was a medium of conversation.

It still has some important aspects, some discussions work great there.

But I think people moved onto other platforms and most (of the cool people)
left.

Twitter (company) needs to go beyond Twitter (the product). Fb knows this
better (while moving the product forward, but it's visible they're reaching a
limit there as well)

Both Twitter products, Vine and Periscope offer an inferior experience to
Instagram videos and Fb live. (Especially Vine. It seems as bad as a Java
plugin)

~~~
jodrellblank
How much of this is a fundamental behaviour?

Not people moving from Twitter because Twitter is bad and Snapchat is good,
but because Twitter is old and Snapchat is new?

Same drive to try newer programming languages and frameworks, same drive to
join new startup companies, same drive to throw out and start afresh in lots
of domains, same drive to leave this bar and try another.

I see this presented along with "online communities die when they can't block
trolls", and "eternal September", and "small communities are more close-knit".

But maybe once it gets old, large, established, you have habits of
interaction, same people you talk to, an established persona to keep up, a
post history, it gets stale and it feels like work.

If you're a service, you can keep customers long term by offering good
service. If you're a brand, you can keep customers long term by staying out of
their way and not messing up and giving them reason to reconsider.

But if you're a meeting place, if you're a look and a feeling, if you're a
venue for nothing in particular - well, fashions change and online, anywhere
else is just as convenient to go to.

~~~
niftich
Some of it is fashion, some of it is 'eternal september' \-- but not all.
Frankly, for a lot of Twitter's usecases, other services came along that met
that usecase _better_.

First, Facebook introduced statuses. Most people's Facebook friends were
people they knew from real life, so for announcing stuff to people you know
from real life, Facebook was where the network was. Later, Facebook allowed
each post to be toggled as fully-public, friends-of-friends, or friends-only
(with 'custom' afterwards), allowing you to tailor each post to a particular
audience. Twitter posts are still always-public or always-private, depending
on how you have your profile set. When Facebook introduced IM, the real-life
friends circle was forever lost to Facebook, leaving only weaker, or strong-
but-online-only, or professional connections to Twitter.

Then Tumblr surfaced, being a snazzier LiveJournal with reblogs. The reblogs
serve as both social signalling and icebreaking, to show people things you
like or find interesting, to fill out the parts where your page would be
otherwise empty or too heavy (full of personal posts) -- it's basically
amusing smalltalk. Tumblr was much better at this than Twitter and provided
better discoverability.

Then Instagram arrived with the emphasis on a picture, with the social
expectation that it's self-made, somewhat curated, something you won't regret
later. When Snapchat showed up, it provided an 'unfiltered' alternative to
Instagram.

So between Facebook, Tumblr, Instagram, and Snapchat, there isn't much room
for Twitter anymore. For those using these four other services, Twitter is
probably the place with That One Friend Who Uses Twitter, or a place where you
go to try to be witty and clever, but no one reads your tweets anyway. All
your friends are elsewhere because the others are _objectively_ better at a
particular aspect of what Twitter was once used for, and so are VIPs and
celebrities at this point, who've built up presences on every single platform,
so no one is missing too much. The only people on Twitter I could possibly
care about are tech bloggers, journalists, actual news outlets, or similar,
and I don't need to be logged in to consume that content.

------
calinet6
Ok, points for the Economist's title 'Twitter in retweet.' That's some fine
pun-crafting right there.

No comment on the service itself. I love it. It's one of the only methods of
public one-to-many distributed communication that actually works well and
stays relatively balanced (mainly due to the limitation on message length and
size). I hope another service with a similar dynamic pops up in its place
should it collapse.

------
spectrum1234
Twitter's huge value is the ability to follow without needing a follow back
(friend relationship).

However they need to find a way to offer both short and long form content
while doing this. It's crazy they haven't tried anything else yet. Perhaps
there is an opportunity for communities to form naturally as well but again
they haven't given this any thought.

So many things they should be trying, its too bad. The concept is amazing but
they are butchering it.

~~~
smacktoward
_> Twitter's huge value is the ability to follow without needing a follow back
(friend relationship)._

Facebook also allows this. (Didn't always, but they do now.)

~~~
sidlls
Doesn't that defeat the purpose of any privacy settings they have?

------
daxfohl
Same for Apple two decades ago. Yeah they never went anywhere.

Which spontaneously makes me think, maybe this CI stuff is the wrong way to
go. Maybe a big-bang release every year where you can make a marketing
statement "imagine if" "now you can" sort of thing.

In fact, as part of the minority 40+ contingent on HN, I'd _love_ if all
services I used released updates only annually and I could know precisely what
they are.

------
throw2016
Twitter is a great service for broadcasting information. Celebrities
connecting with their fans bypassing press and other middlemen, that's huge
value for them and they love it. Public officials making emergency and other
announcements, custom tags for large events.

The average celeb promotion, public dept or event budget can easily afford to
pay twitter for engagement and value adds like analytics or any other value
adds they can come up with for these profiles. They just need an excuse to
pay. Forget ads, focus on this.

------
JonnieCache
I've still never encountered a single person who posts to twitter except as
part of their job or to promote themselves or one of their projects.
Supposedly these people exist in their millions but I've no idea where they're
hiding. Are they mostly schoolchildren?

~~~
unfunco
I do (I won't post a link because this isn't self advertising, but my username
is the same as it is here) – I work for a software company, I have my own
company too (but I'm a procrastinator) – Twitter for me is to opine on
political news or news I'm otherwise interested in (chemistry, psychedelics,
etc) – none of which have anything to do with my job (and my employer would
likely frown upon it too.)

------
vegabook
The Economist has a knack for getting on the case of sectors / companies
whenever their price is at an extreme - and being wrong. It's actually a good
contra-indicator, as we've seen with oil, shale, gold, more recently Deutsche
bank, and now Twitter.

~~~
PhantomGremlin
_It 's actually a good contra-indicator_

My all time favorite wrong call of theirs came in 1999. Oil had dropped to $11
and they were predicting that it could hit $5:

    
    
       a “normal” market price might now be in
       the $5-10 range. Factor in the current
       slow growth of the world economy and the
       normal price drops to the bottom of that range.
    

Of course, oil did just the opposite, climbing to about $140 per barrel over
the next decade.

[http://www.economist.com/node/188181](http://www.economist.com/node/188181)

~~~
vegabook
totally agree. They're infamous for this front page call. Remember when they
also were lauding Gordon Brown for selling half of Britain's gold for an
average price of 270?

------
tomkin
Twitter lost me when they dumped on their ecosystem. The changes made to the
platform in recent years are obvious grasp at straws rather than anything
revolutionary. It's clear that investors have become Twitter's main concern –
to a point where even something like a paywall or subscription wouldn't
surprise me.

Twitter does not need to have as many employees as it does, and has them
solely to rise to some zero sum pissing match.

------
conistonwater
This reminds of something Aswath Damodaran pointed out a while back, that
software companies that rely on advertising are collectively overvalued, in
that they would need to altogether capture more than 100% of the market in
order to justify each individual valuation. So any failure to "exceed
expectations" results in a seemingly unreasonable drop in market value. [1]

[1] [http://aswathdamodaran.blogspot.ca/2013/10/when-pieces-
dont-...](http://aswathdamodaran.blogspot.ca/2013/10/when-pieces-dont-add-up-
micro-dreams.html)

------
evanjacobs
I would have liked to see Twitter become the product that Slack is now for
many people: great direct message and group message capabilities, fun
interface, great API for enabling bot integration, etc.

------
icc97
The one thing that surprises me is that twitter isn't doing better given how
unrelevant the facebook adverts are compared to the twitter adverts.

I find twitter adverts to be on a similar level to Google ads. I might not be
interested in the adverts right now, but often the promoted tweets are at
least relevant.

Facebook on the other hand gives me adverts about adopting a pony to celebrate
my dead father.

------
paulsutter
Twitter is important, useful, and will never be as big a business as Facebook.

The problem is that they can't admit this and are pushing to be something they
cannot be. Thats why they have so many product managers showing each other
powerpoints, each of whose responsibilities are so small that no forward
progress can be made.

------
Mendenhall
It is interesting to me to hear how many say it doesnt have value to them. For
me one aspect alone is worth it and that is real time news. It makes
everything else look archiac.You can also scan a wide range of peoples
opinions and find varied sources and angles fast.

------
tangue
Reading all this, I miss Jaiku. Google miss social in the same was MS miss the
Internet.

------
andriesm
I wonder if their deplatforming of several well known but controversial public
figures played any role in the fall of twitter. If you say something unpopular
or un-pc we'll ban you. Note how reddit almost went into a similar death
spiral around the time they upped their standards of what is deemed
"acceptable" speech. Note I'm not expressing my opinion here that hate speech
is a good (or bad) thing, merely noting a correlation. May not be causation,
but an interesting data point nontheless.

------
swiftisthebest
Twitter should've been a protocol.

~~~
xj9
NNTP 2.0

------
animex
...And they destroyed their 3rd party app/developer ecosystem which would have
helped their growth.

------
freewizard
It's a pity this article didn't but I assume it'll be interesting to compare
Twitter with its copy cat Weibo in China, who went public Q2 2014, 6 months
after Twitter, and started to see profit quarters since Q4 of the same year.

------
fairpx
Twitter should do what Odeo did. Odeo was failing, they started working on
other ideas. One of those sideprojects was... Twitter. In the same spirit of
experimentation and discovery, Twitter should work on tiny sideprojects and
make more small bets.

------
startupflix
Twitter is loosing users because of lack of innovation. They aren't adding
necessary new features. Even the existing investors aren't happy.

What features should they introduce. any suggestion?

~~~
adrenalinelol
Twitter is being told to be Facebook, when in-fact it needs to follow an
entirely different paradigm, because it's intrinsically a different product.
If Twitter is judge by what Facebook judges Facebook for success, it'll always
fall short.

------
sjg007
You want the global conversation to take place on Twitter. Tweets can run on
an event, at an event, and when live streaming or restreaming an event.

------
thr0waway1239
I love the title. Economist article titles are an endless source of word puns.
Someone should start a thread just to post the best Economist titles.

------
randomsearch
What is Twitter doing wrong? This is an interesting question.

Answers posted so far:

\- it's polarizing... this may be true, but would simply mean a smaller
market, not an existential risk.

\- they demolished the dev ecosystem. I totally agree with this, and think it
was dumb. They thought they were Facebook. But I don't think this fully
explains why their core product isn't a big success.

\- they don't have a strong enough business model. This is a bit of a
tautology - we wouldn't be discussing it otherwise - but not having a strong
business model does not explain why the core product doesn't _feel right_.

And that's the thing, you look at Facebook or Instagram and everyone "gets
it". They may not _like_ it, but they understand what it's about.

But Twitter doesn't feel like that. It doesn't feel intuitive. It feels like a
mess, like a lot of different use cases rolled into one big disorganised
poorly designed app.

I read a bit about Twitter's history and my theory is that the problem stems
right back to the beginning, when there was an argument amongst the founders
about whether Twitter was for "micro-blogging" or for "news" (for some
definition of what is newsworthy).

Both these seem like good ideas. We're all interested in our friends' opinions
on various things, and what they're up to right now, and add to that the
opinions and activities of people we choose to follow because we respect them
and find what they say interesting, that sounds like a compelling product.

Likewise, keeping track of all the news on a variety of topics from many
sources, hearing the news unfiltered from the actors involved, that is another
very compelling product. Put me in direct contact with Elon Musk about what's
happening at SpaceX, let me tweet Sam Altman to ask him something about YC.
Cool.

It's interesting to consider that clearly selecting one of these use cases
would solve many of Twitter's biggest problems. If you're following your
friends and some famous people's microblogs, why not enforce real-world ID? If
you're after the latest news, do you really need to be able to spam or message
everyone? Both situations allow for a reduction in trolling and the negative
behaviours that have made Twitter (as one unforgiving observer put it) "the
cesspool of the internet".

Problem is Twitter doesn't set out to do either of these things, because it
can't decide what it wants to be. So it has compromised and floundered with no
clear vision. How can the employees work effectively if they don't know which
way to row?

The solution for Twitter _would_ have been to split into multiple
services/views/subsystems, or abandon the least interesting one to a sibling
startup or a competitor. As Sam A puts it so brilliantly: "focus + intensity".
Still time. Not much time.

------
shmerl
Diaspora* on the other hand continues growing, even if not rapidly.

------
personjerry
Time for someone to build the Facebook to Twitter's MySpace

------
twsted
Twitter _is_ a giant.

Facebook is an anomaly.

It is matter of perspective.

------
andreygrehov
The submission has 140 points at this very moment. I find it ironic :)

------
ComputerGuru
There is a typo in the title that completely fried my neural circuits for a
full 5 seconds or so.

> It is too late for the it to become giant people expected

Should obviously be "It is too late for it to become the giant people
expected"

(Sidebar: I hope this isn't what it feels like to be dyslexic, it wasn't fun!)

~~~
userbinator
Apparently the typo has been fixed now, but I still find it confusing to parse
--- I parsed it as "It is too late[something unclear], "(giant people)
expected" and wondered what exactly giant people had to do with Twitter.

Perhaps "It is too late for it to become the giant _which_ / _that_ people
expected" can break the natural inclination to parse "giant people" as one
noun.

------
simbalion
First, the article is dumb, twitter is already a giant. Twitter is bigger in
social media than facebook because it is open to the public, while facebook is
a gated community.

Second, "the problem with twitter" as commentors have been saying, is that
Twitter is a glorified instant messenger, and they have done everything wrong.

They're a giant corporation with too many employees. They have a huge overhead
cost for servers and offices and electricity and so on. And their only product
is social media, for free.

This is the era of ad-filtering. Substaining a company on advertising is a
dead model, it will never work again. It's dying slower in some areas than in
others, but rest assured it is dead. Furthermore, nobody using twitter wants
to see ads. Users will aggressively persue means to eliminate ads from the
"social" experience.

Twitter is the digital equivalent of opening a number of sports arenas and
inviting everyone to come in to mingle, without ever charging admission fees.
Eventually, the power bill and lease is going to shut them down.

This is a reality check. You cannot make money by giving things away for free.
You can make money from free products, but you have to do things to monetize
it, for example selling expert support for free software.

Commentors keep comparing Twitter to Facebook. Twitter and Facebook are
exactly the same in one way, neither one makes any money from social media.
Facebook is profitable because Facebook is not a social media product, it is a
portal product that offers social media. Facebook makes money from selling
"microtransaction" games, which are a huge ripoff, and using their enormous
size to convince business owners that investing in advertising is somehow
worthwhile. Again, nobody wants to see ads during their "social" time.

Social Media is not a business. Social media is a chat room with a slightly
re-defined UX. You cannot make a profit from social media without charging
admission. It is impossible.

In the post-advertising era the only way businesses will be successful is if
they produce products or services of actual real-world value to their
customers. Parasitic businesses, middle-men, advertisers, they are all going
to die. And good riddance. Money should be earned by the creation of value,
and nothing else.

~~~
adotjdotr
"Substaining a company on advertising is a dead model"

A Deloitte report explained FB has created $40bn of economic value across the
world. Let me explain to you how:

\- People are selling shit on social all day everyday \- Every organisation
markets themselves using social \- social media is where most attention on
mobile is \- All social media platforms make ads \- Ads are charged on CPM
(Cost per 1000) \- Trillions of impressions are served, therefore billions of
ad dollars flow to the platform, billions with a b \- All these businesses
have 100s of millions if not billions in cash on their balance sheets

For the record these ad products have kept 1000s of people in advertising jobs
around the world and helped around 3 million advertisers spending billions
collectively sell shit online.

~~~
simbalion
Computers and the internet are relatively new, compared to advertising. The
ad-blocking era is only about 5 years old.

Give it time, you will see that I am right.

Again, facebook is not a social product. Facebook is a portal product with a
social feature. They're not competing with Twitter, they're competing with
Google and Microsoft. It is apples and oranges.

