
Twitter's sputtering user growth unnerves investors - blo
http://www.reuters.com/article/2014/02/05/twitter-results-idUSL2N0LA1ZX20140205
======
Cookingboy
I used to think Wall Street is very evil at sucking up the wealth of the rest
of the country to line up the pockets of themselves while creating no real
value. Nowadays I am pondering whether Silicon Valley is guilty of similar
practices.

We see companies like Twitter, Salesforce, Netflix, etc goes IPO and commands
a ridiculous valuation while having paltry profit/revenue under the name of
"growth stocks", while suburban moms in mid-west buy those stocks up because
they read about them on CNBC.

Then the founders/VCs cash out big time and then use the money to prop up the
next series of startups, then rinse wash repeat. How much of this is
sustainable? Maybe once in a blue moon a company with P/E of 500 is justified
because they MAY be the next Google or Apple or Microsoft (ironically, none of
those companies ever traded at that kind of P/E themselves, oh my..the days of
only taking your company public AFTER you started making tons of money...),
but these days when that kind of growth expectation is the norm then obviously
most of them are in for a big crash in the future, since we aren't going to
have a "next Google" every 6 months.

I wonder if this bubble will deflate slowly or crash and burn like it did back
in early 2000s.

Sigh...I'm in my mid-20s and I actually work in SV but I already sound like a
old geezer when talking to some of my peers about the tech industry's near
term prospects.

~~~
sz4kerto
"Maybe once in a blue moon a company with P/E of 500 is justified because they
MAY be the next Google or Apple or Microsoft"

What about a company with a size of $100Bs and PE of 500? :) Everybody knows
who I'm thinking of ...

~~~
Cookingboy
Haha, although I do believe in Jeff Bezo and Amazon's vision, the current
valuation is very high. I can see Amazon one day reaching Google's current
profitability, but there is no way the P/E ratio would maintain close to what
it is now (other wise Amazon would be worth about 10 TRILLION dollars). So the
effect is that even if Amazon is tremendously successful in the future, the
stock will probably experience a period of "relative stagnation" as the value
of the company catches up to the tremendous valuation, then gradually grows
proportionally with the profitability of the company.

~~~
adventured
Google is at about a $13b annual profit run rate these days. Amazon would need
sales of $250b to $325b to hit that level. Needless to say, that's a very,
very, very long ways off: maybe decades.

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dangerlibrary
Re: slower user growth - I wonder how much longer it's taking new twitter bots
to find unused handles...

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dredmorbius
Reuters link as Yahoo tends to evaporate its articles:

[http://www.reuters.com/article/2014/02/05/twitter-results-
id...](http://www.reuters.com/article/2014/02/05/twitter-results-
idUSL2N0LA1ZX20140205?feedType=RSS)

------
orthecreedence
"Twitter investors disappointed by reality that growth cannot be infinite"

~~~
Touche
Twitter has never made a compelling case for "regular people". The reality is
that if you don't have a lot of followers the experience on Twitter isn't very
compelling. You see lots of tweets from celebrities you follow but you don't
see everything because the stream passes too quickly. You never tweet yourself
because on the few occassions you did no one responded (you have 50 followers
who either don't use the service often or when they do have the same stream
overflow problem you have).

Twitter should seriously consider making people you interact with get
precedent in the timeline. That would allow you to see tweets from people you
know IRL easier and make interaction more common.

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electic
I wonder how much of this is a direct result of the destruction of Twitter's
once vibrant app ecosystem. We have seen platforms that do this, time and time
again, sputter and die. Platforms, such as iOS, who embrace developers thrive
and grow to nice levels.

~~~
taterbase
I can't help but agree. What made twitter so interesting and fun initially was
how it was so easy to integrate with everything. It became a widely used
messaging/information platform for apps to take advantage of while also
allowing other devs to build their own spin on what a Twitter app should look
and feel like.

I really think Twitter _could_ have been better off by selling developer
access to the pipes. Charge by the user or by the api call. Some way to still
encourage the 3rd party platforms while also seeing some monetary benefit from
it.

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rurounijones
"* Twitter one of Internet sector's most highly valued stocks (Adds analysts'
comments, share action, earnings details)"

Methinks they forgot to finish that bit

