
Struggling Twitter lists over 183,000 square feet for sublease at its S.F. HQ - abradabra
http://www.bizjournals.com/sanfrancisco/blog/real-estate/2016/08/twitter-sublease-midmarket-sf-office-twtr.html
======
nl
I find it strange that no one seems to have identified Twitter's real problem.

Twitter _is_ a real business - it has users who are at least as passionate as
Facebook, it is much more influential (cite: the number of mainstream figures
who actively use it) and yet, even now, in the middle of the most hotly
contested election campaign in memory, when one of the two candidate's
_primary means of communication_ is Twitter they still aren't releasing any
new features to support the way people use it!

Think of this: Instagram copied Snapchat stories, which is _exactly_ the kind
of feature that Twitter users would use.

And think of how many features FB has built (and how many abandoned!) since
the last time Twitter shipped a major feature.

The need to find a way to try new things, and they need to do it quickly.

~~~
fdsaaf
My understanding is that Twitter's culture has strangled it. I've heard that
they developed a culture of blaming individuals when things went wrong, but
distributing the credit when something goes right. Consequently, Twitter
developers don't want to ship anything. There's no upside --- only severe risk
of being flamed, punished, and fired.

------
yladiz
I don't know if it's an overall trend of stagnant growth or slowing economy,
but bigger companies/unicorns are definitely feeling the pressure from
overvaluation and being forced to downsize employees and office space, as
evident by leasing out office space they bought up and doing down rounds. It's
kind of this version of the dot-com bubble popping, except this time it's more
of like a slower deflation than a pop.

~~~
KKKKkkkk1
Am I the only one who hears echoes of AOL-Time Warner in the Jet.com
acquisition by Walmart?

~~~
trimbo
What similarity do you see? At the time of AOL-TW, both were profitable and it
was the largest US merger ever.

~~~
smileysteve
[Aol drastically miscategorgized R&D as an asset, paid itself, and recognized
loans as revenue - to the extent of fraud]([http://www.washingtonpost.com/wp-
dyn/articles/A64365-2005Jan...](http://www.washingtonpost.com/wp-
dyn/articles/A64365-2005Jan10.html))

As an Atlantan who has seen Ted have to sell most of his Turner based business
interests (Braves, Hawks, TBS, Thrashers) I can tell you it wasn't a very
profitable merger.

------
bpodgursky
At $66/square foot (quick google), that would be 6% of their revenue as of
their last earnings report. Which is kinda insane.

~~~
1123581321
For reference, 6% of revenue is what a marketing agency/consultancy pays on
average for offices. Mature software product companies should be earning a
higher multiple of expenses.

~~~
michael_storm
I'm curious -- why is that? Marketing agencies/consultancies set up on prime
real estate in order to impress clients, whereas software companies typically
wouldn't care so much about location?

~~~
jpmattia
> _Marketing agencies /consultancies set up on prime real estate in order to
> impress clients,_

which is really bass-ackwards when you think about it. If I have the choice
between a badass agency who watches costs or a badass agency that is spending
piles of dough on glassy offices, I know where my dollar is going to go
further.

~~~
CaptSpify
It sounds backwards, but if you think about it: A marketing firm's job is to
"wow" you, not be efficient. Sure, they'll "waste" money on trivial, flashy
bullshit, but that's kind of what marketing is

~~~
jpmattia
> _A marketing firm 's job is to "wow" you, not be efficient._

Glassy offices work in the segment for which that is true. There is another
segment, which wants maximum ROI ie customer-wow-per-dollar. And that's the
segment hindered by glassy offices or oversized trade booths.

~~~
CaptSpify
As an engineer, I completely agree with you. I want hard numbers, and logical
decisions. But that doesn't sell to most people.

------
discardorama
Twitter is the Yahoo of this generation.

~~~
Alex3917
Not really. There is something bigger going on here.

When is the last time you saw an article on the front page of HN/Reddit with
blogging advice, or making the case for developing a personal brand? Who are
the top ten most up-and-coming bloggers of the last year? It's not just
Twitter that's underperforming, the whole social media space right now is
super fragmented and lacking in direction.

~~~
adrianN
Back when "the social media space" was people's blogs, a blogroll and
pingbacks (or before that, when it was basic HTML and webrings) it was super
fragmented, yet somehow the quality was a lot better, the protocols were open
and you didn't have to give anyone your private information to participate.
Maybe we can go back to that.

~~~
pjc50
Indeed - I'd almost say that "fragmentation" was _good_. What's the opposite
of fragmentation? Homogenisation? Centralisation?

Fragmentation allows "scenes" to develop without instantly being overwhelmed
by tourists. It allows experimental weird subcultures.

~~~
trahn
Concentration?

------
microcolonel
Am I the only one that thinks that Twitter is not and should not be a growth
company? It has a clear function of attractiveness which is linear with the
population of the earth. All of the people who want to use Twitter are (for
the most part) using it.

The only reason for me _not_ to use Twitter right now is all of the
ridiculous, desperate nonsense they are doing to maintain their outsized
workforce. If they would make timelines linear again, and focus on improving
performance, their audience could be maintained and their ad revenues could be
retained; they'd also have room for improving targeting.

~~~
alatkins
Agreed. It's a web app that should be a protocol. The tent.io guys were
thinking in the right direction, but they didn't seem to really get much
traction.

------
dmode
I feel Twitter is constantly chasing the wrong metrics - MAU and DAU.
Twitter's reach is far more compelling that their MAU numbers. Imagine the
number of people that have read a Donald Trump tweet but have never logged
into Twitter. Twitter, IMO, should be singularly focused on impressions and
embedding ads in impressions no matter what the channel is (other websites,
CNN, Facebook etc.)

~~~
Eridrus
People would probably stop embeding tweets if they had ads; unlike youtube,
you can just take a screenshot of a tweet and insert it into your article.

------
SmellTheGlove
Twitter should be looking to move. They're relatively mature now. Why do they
need prime downtown SF office space, and so much of it at that?

------
cloudjacker
IIRC Foursquare's primary revenue model was also subletting its office in
Soho.

------
forgetsusername
San Francisco real estate and Technology stocks are highly correlated. So is
Twitter needing to lease its space, at high prices, a good or bad omen?

~~~
justinzollars
I think its a bad sign. But then again, prices are still way up in the East
Bay.

------
imcqueen
Is this maybe a "sell high" scenario for twitter? Sounds like the article is
suggesting that, while demand is still strong, the supply of available office
space is rising.

Perhaps their thinking is to get the asset under lease while the price is
still at it's current rate and then spend on expansion later if it's necessary
(at theoretically lower prices based on the supply trend?).

~~~
twblalock
The current tech boom started around 2011-2012, and a lot of companies signed
multi-year leases around that time. My company leased an office for 5 years in
2012, and our lease will expire in early 2017. We expect the price to increase
substantially, and we are considering moving the office to save some money.

I suspect a lot of 5-year leases are going to be ending this year, and a lot
of companies will be looking for new space. If Twitter might as well get a
piece of the action, if they aren't using that part of their building.

------
ben_jones
Didn't they let a lot of people go in the last two years? It seems sensible to
me to downsize office space after that kind of thing. Would it be better to
their PR if they just burned money on the empty space?

------
Animats
Twitter's core business could be handled by a team about the size of
Craigslist. They tried to add too many features, many ad-related.

Somebody should set up OpenTweet as a budget competitor.

~~~
notatoad
many people have tried to replicate twitter's core features, and failed. the
sales and ad services are what make them a viable business.

~~~
nicky0
To be fair many have succeeded in replicating the core features (app.net
etc.), they failed in getting user traction.

------
bonniemuffin
The author refers to twitter as "San Francisco's second-largest tech
employer". What company is SF's largest tech employer?

~~~
burglecut
Salesforce according to this:
[http://www.bizjournals.com/sanfrancisco/blog/techflash/2016/...](http://www.bizjournals.com/sanfrancisco/blog/techflash/2016/03/san-
franciscos-25-largest-tech-employers.html)

~~~
honkhonkpants
That seems to seriously underestimate Google's footprint in SF. If 180000
square feet is enough space for 1400 twitter employees, you can extrapolate
from Google's public leases that they have enough space to be either the #2 or
even #1 tech employer in SF.

1: Both sides of the Hills Plaza building: ~450k sq. ft. 2: 250k sq. ft. at 1
market. 3: the entire 188 Embarcadero, which looks like maybe 75k sq. ft.

Just straight-line extrapolating from the Twitter property, that's space for
over 5000 people.

[http://sf.curbed.com/2014/7/25/10069066/future-google-
landlo...](http://sf.curbed.com/2014/7/25/10069066/future-google-landlord-one-
market-plaza-spiffs-up-dusts-off)

[http://sf.curbed.com/2014/7/14/10074388/google-
buys-188-emba...](http://sf.curbed.com/2014/7/14/10074388/google-
buys-188-embarcadero-casts-anchor-in-south-beach)

~~~
khuey
Google doesn't have all of the Hills Plaza building. 2 Harrison St still
contains a bunch of other tenants.

~~~
honkhonkpants
Ok but the north side alone is pretty large and anyway wouldn't you agree that
1500 is a very low number for those three properties combined? I'm sure they
have other offices that haven't been made public, too.

------
DominikR
Maybe Twitter should be less concerned with censoring Conservative voices and
dissenting opinions that disagree with third wave Feminism and Social Justice
Warriors (yet radicals like ISIS can still propagandise via Twitter) and spend
more energy trying to actually make some money.

But it's a private company so they can do whatever they like with it. I wonder
anyways who would invest their own money in Twitter. The fundamentals always
were and still are so bad you'd have to be nuts or a true believer.

~~~
RubyPinch
how were the fundamentals bad?

it was a SMS based broadcast service, no?, and it largely still is (only
dropping the "SMS" part, but keeping all the baggage)

~~~
DominikR
Twitter was hyped as one of the greatest Internet businesses, yet it makes 7
times less profit than a company like Yahoo, that is loosing now for 15 years
in the market.

That is also reflected in Twitters stock value, which lost 60% of it's value
since the IPO.

Billions were literally burned by investors on this company because they will
not even get back their investment.

As a developer I would never touch something like Twitter just as I wouldn't
work for Yahoo, as it's a sure path to destroy your own career. (what career
progress can you make in a company that will most definitely be irrelevant and
likely even out of business in the next few years)

If they couldn't get their business model right after 10 years, they likely
never will.

Edit: Just have a look at Twitters PE ratio

[http://www.nasdaq.com/symbol/twtr/pe-
ratio](http://www.nasdaq.com/symbol/twtr/pe-ratio)

That's one of the worst in the IT industry. Ridiculous!

