

Growth Rates Don't Matter: How Userbases Don't Always Confer Profit - mklurfeld
http://techgeist.net/2009/04/growth-rates-dont-matter/

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ewjordan
Talking about Twitter in the same breath as YouTube just doesn't make sense -
YouTube's troubles stem from the fact that its costs are through the roof,
being a streaming video site and all. In order to come out of the red, they
have to make a pretty large amount off of each viewer, and that's tough to do
when advertising rates are depressed.

Twitter, on the other hand, sends 140 character messages back and forth. Yes,
they've had scaling issues, but that's because they blew up from a tiny
operation into a major success overnight without the manpower to handle the
growth, not an indication that their costs are too high. If they flip pretty
much any monetization switch, they'll become profitable quickly.

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utnick
given the current txt message rates, the cost of sending a txt message might
be on par with streaming a video

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diego
Who still uses Twitter via SMS? Out of those people, who receive tweets via
SMS (the ones Twitter would have to pay for)?

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chacha102
They cut that for a lot of countries, yet they say they can operate for years.
Why not spend that money they are sitting on with innovating their service,
creating features that can actually make money.

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mattmaroon
"Good for Twitter, but this will not translate into any money for Biz Stone,
one of the site’s founders, until the microblogging platform is monetized."

Umm, tell that to the YouTube guys (ironic given that that is the example he
uses to make his point). There's no law that says your company has to turn a
profit before anyone can buy it.

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mixmax
In the microeconomic sense you're right, in the macroeconomic sense you're
wrong.

Selling off a company based on users that aren't monetizable is basically a
ponzi scheme that just passes the buck to the next idiot in line until it all
collapses.

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mklurfeld
This might be the truest statement I've read all day

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aston
Good point re: Youtube, but the fact that eBay thinks they can spin Skype off
into an independent company implies that it's profitable or near to it.

edit: A little digging confirms it -- [http://www.pehub.com/37158/is-skype-
profitable-now-we-know-y...](http://www.pehub.com/37158/is-skype-profitable-
now-we-know-yes)

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foulmouthboy
Quality > Quantity.

Big Quantity of Quality > Small Quantity of Quality

~~~
proee
Big Quantity of Quality >> Small Quanity of Quality (much much greater)

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gojomo
Uninformed choice of examples: Skype is very profitable. (See the link aston
provided.)

