
10 years later, Twitter still isn't making money - chirau
http://money.cnn.com/2016/03/21/technology/twitter-10th-anniversary/
======
atishay811
Twitter has been giving away more and more ground to Facebook. Facebook groups
are not even suited for a lot of things that they have become and twitter
should have been there. Twitter needs to look at what the use cases are:

\- Customer Support, twitter is customer support for a lot of companies and
being public makes grievance redressal possible. They just need to get better
tools and charge companies for being their support interface. The companies
may not have choices.

\- Events. Twitter is the heart of events. Create tools to manage public
events and charge for them. Give something to the organizers and take money
for it.

\- Pages. Give an alternative business model to facebook. Its too big to fight
right now. Give a paid version of facebook pages with a promise of not losing
organic growth. Brands spent a lot on getting tons of likes that are not
useful any more. Followers are still somewhat valuable. Make pages interesting
for brands (give them something to justify the payment).

\- Advertising is not always the solution. Customize for the key use cases.

\- Open up. Facebook is the AOL of social. Someone needs to step up and be as
open as the internet. Aren't you suffocating behind the closed doors? Did you
really have a reason for closing them?

I know twitter isn't listening.

~~~
eigen-vector
I would pay for a TweetDeck subscription. They have consistently acquired
products and have ignored them. It is a shame they don't invest more resources
on TweetDeck. I am just an end user and I find TweetDeck to be one of the only
sane ways to use Twitter. I simply cannot imagine how beneficial TweetDeck
would be as a tool for someone who does marketing/handles brands.

A recommended tweets/articles tab a la Pocket's recommendations feed would
also bring in a lot of customers for their promoted tweets. The problem isn't
ads/sponsored tweets, its how poorly Twitter chooses to present them.

------
unabst
Twitter users _have_ money because adults have money. The inability to make
any value proposition worth paying for is almost admitting you're worthless.

Per James Altucher, for my 10 ideas a day exercise:

\- Pay-to-view, pay-to-subscribe twitter accounts. Exclusivity always sells.

\- Twitter tools/analytics for fees.

\- Developer tools for fees.

\- Pay with your twitter account (we already login).

\- Paid tier for advanced users who manage multiple accounts.

\- BUY straight off a tweet.

\- Sell API access to power users (rate limit tiers).

\- Remove ads for a fee.

\- Push twitter search, and sell more ads on increased searches.

\- Sell themselves to facebook.

These are all pretty obvious, so they must have reasons not so obvious not to
do them. One would guess twitter's brainstorm meetings are veto-fests just
from their lack of interest in doing anything interesting or progressive...
but maybe they just don't sweat it because they're sitting on 3B cash. (that
must be it)

~~~
coldtea
Most of these are "tried and failed again and again" attempts that have been
"obvious" since 1999.

Sure, they could sell "no ads", "exclusive accounts", "developer tools", etc.
None of these will entice enough users to be remotely worth it -- as it hasn't
worked in most other platforms.

This is for something at the scale of Basecamp or Automattic to make money,
not Twitter.

~~~
kmnc
Your probably correct, none of these solutions in this thread could actually
beat the advertising model even if that isn't profitable for them and trying
them isn't worth the risk. It just seems weird to me that twitter basically
owns the fanclub for every celebrity in the world and can't monetize access.

~~~
coldtea
> _It just seems weird to me that twitter basically owns the fanclub for every
> celebrity in the world and can 't monetize access._

I think the problem is they don't own the fanclub. Only part of it.

Fans also go to: the artist's webpage, the artists YouTube channel (or YT in
general), the artist's Facebook, and places like Spotify, Apple Music etc,
even places like Reddit for AMA, news sites for interviews, etc.

If Twitter had managed to create and provide a full blown artist/entity
"fanclub" experience they would probably fare much better. Just seeing artists
"tweets" wont cut it.

------
kmnc
Here is my vision for twitter: copy the patreon/twitch/kickstarter model which
you should of lead from the beginning. Why can't I subscribe to @lebron_james
for 5$ a year and get exclusive lebron james emotes that can be used on
twitter? Then @lebron_james has giveaways, product bonus codes, exclusive
subscriber only tweets etc. Exclusivity is the new product and people will pay
for it. Then lebron's social media team actually has something to do, paying
customers, and an incentive to increase quality of his presence on twitter.

If people could sub to @lebron_james for 20$ a year and it got me in
ticket/product giveaways, fancy lebron james emotes, a free sneak peak at the
next kanye album, removed ads when viewing his feed, and the odd exclusive sub
only tweet would people do it?

~~~
cableshaft
If the Patreon model were as simple as clicking a button on a user's twitter,
I'd probably use it more. I think you're onto something here.

------
zelias
Twitter is a great product that lacks an effective business model. A similarly
influential product that has been used widely for many years (Wikipedia)
didn't have to deal with this problem because they are a non-profit.

Maybe the only way to save Twitter the product is to kill Twitter the
business.

~~~
johncolanduoni
I don't think Twitter will receive the kind of donations Wikipedia does, from
either individuals or institutions. The increasingly toxic nature of discourse
on Twitter (whether you agree with what people are saying in a particular
instance or not, most viewpoints end up being accompanied with death threats
and doxing) makes it unlikely they can make a successful case for filling an
important need of humanity.

~~~
digi_owl
Frankly i see that kind of behavior spreading across the net in recent years.

I find myself thinking it started with Anonymous getting a bunch of press for
similar antics. And over time other individuals and groups have adopted them
to further their own goals.

Hell, some of it may well be organized as a kind of online cointelpro.

------
spangry
I've commented on this in the past so here's the short version (long version
here
[https://news.ycombinator.com/item?id=11077269](https://news.ycombinator.com/item?id=11077269)):

As heretical as these sound, I think there are only three ways for Twitter to
generate significant profits (and they all carry significant drawbacks):

\- start charging for API calls above some threshold (i.e. charge for market
research)

\- start charging commercial entities based on number of followers (or volume
of tweets)

\- use adsense (better user data linkability)

tl;dr - Twitter creates significant value. But it's difficult for them to
capture at least some of that value as profit (unlike Facebook).

~~~
troels
_use adsense (better user data linkability)_

The problem is that if twitter is stripped down to a protocol/platform, you
can't really force ads in there. It's something that can be put in clients.
That's what got them in trouble before.

~~~
spangry
Good point. It's a bad example. In hindsight, what I was trying to get at in
the third idea was slightly different to the other two. The first two are
methods to capture some of the value they generate. But it's a risky
proposition IMHO; when capturing value some of it will be destroyed (kind of
like how taxation causes dead-weight loss). There's a possibility that the
value proposition hits zero or goes negative, at which point Twitter is dead.

The third, less risky, option would be to capture data in adjacent markets
(probably via start-up acquisition). If they capture adjacent data that, when
combined with existing holdings, the value they can offer to the 'money' side
of their platform (e.g. advertisers, developers) increases more than linearly.

At which point it's safer to 'tax' the money side of their market. Personally,
I'd go for advertisers first: unlike developers, advertisers don't increase
platform value for the other side of their market (users).

------
hackaflocka
Twitter is suffering from "nostalgia" syndrome.

They keep talking about how they were the first at such and such thing. About
how they invented this and that thing.

This is the reason why Steve Jobs had the Apple museum removed from 1 Infinite
Loop.

They need to start looking at how competition is eating their lunch, instead
of living in the past.

------
Animats
Looking at Twitter's 10-K as an ongoing business:

    
    
        Current liquid assets: $4,381,792,000
        Net loss for year:     $  521,031,000
    
        Time to live:               8.4 years
    

Twitter is a public company with one class of stock. It's ripe for a
takeover.[1] Market cap is about $11 billion today, so a straight liquidation
is out, but a takeover with a downsizing is likely.

[1] [http://www.fastcompany.com/3055735/fast-feed/twitter-is-
ripe...](http://www.fastcompany.com/3055735/fast-feed/twitter-is-ripe-for-a-
takeover)

------
nissimk
Unfortunately, Twitter's user facing technology has been declining in quality.
It's too bad because I like twitter a lot. I can report the following issues:

1) many links to deep inside twitter (eg: user's feed or a particular tweet)
will actually bring me to my twitter home page.

2) android app destroys the battery. This is true of many social media apps,
but unlike facebook, twitter's mobile web app is barely usable. It keeps
insisting that I get the native app and it's extremely clunky and slow. Also,
many features aren't there, particularly twitter search.

Back when they were more open with their api and there were alternative
clients it was a better experience.

I know none of this has anything to do with their lack of a business model.
Also, I don't want to discount their contributions with bootstrap and the big
data stuff they've done. Hopefully they won't end up like Yahoo.

~~~
m52go
Have you tried turning down the sync interval (located in Settings >
Notifications)?

That tremendously helped my battery usage.

------
DickingAround
If there were functioning micro-payments system on the net I suspect this
would have turned out a lot different. Customers would be less angry paying
$1/month for the service (230M users, ~700M in costs per quarter ~=
$1/user/month). They might even be able to cut that by 75% or more if they
just stuck to their core competency, which is communications, not advertising.

~~~
tamana
$1/mo isn't micropayments, it is easily charged by credit card mobile phone ,
with auto recurring

------
codingdave
This conversation has been re-hashed ad nauseum over the past 6 months. My
take on it remains the same -- their revenue is fine. They need to reduce
costs.

------
daxfohl
Twitter needs to market itself more as a platform. If HN had "its own twitter"
and SO had "its own twitter" and BBC had "its own twitter" I'd probably have
accounts on all of them. If those could be aggregated, but still kept
independent, even better. There needs to be a layer somewhere between
"Twitter" and "user". I still like twitter a lot, but have to admit I'm
feeling it less these days.

~~~
junto
It sounds like email, but limited to 140 characters!

------
metaphorm
So the question on my mind after reading these kinds of articles about Twitter
on a regular basis for years now is this one:

what does Twitter think the value of Twitter is? do they have an idea but
won't say it (vis a vis charging money for it) or do they just not even know?

------
nsxwolf
I'd love a federated alternative to Twitter. If Apple, Google and various
Linux people all agreed to bundle a compatible client into their operating
systems, it would have a chance at overcoming network effects.

------
alexberman2
Classic twitter - the ads just aren't effective. As a marketer I want to spend
on new channels but there needs to be an ROI.

~~~
chirau
So as a marketer, how would you pitch Twitter differently to make it more
lucrative?

~~~
criddell
I think advertising is the wrong model for Twitter.

Every ad I see makes Twitter maybe 5 cents? I'm guessing they earn $40 / year
on me (I'm not a heavy uesr). I wish I could just pay them $40 and not have
any ads inserted into my stream for the rest of the year.

~~~
emeerson
Both the 5c/per ad and user-willingness-to-pay estimates are way optimistic.
Ads you see probably has a CPM (cost per milleu, or thousand) of at $5 on the
upper end and I'm guessing average around $1 CPM, which would be .5c and .1c
respectively.

Facebook's per-user revenue in the US as of Q4 2015 was around $11/yr (source:
[http://www.businessinsider.com/facebook-average-revenue-
per-...](http://www.businessinsider.com/facebook-average-revenue-per-user-is-
up-sharply-2015-11)) although its grown by 50% yoy.

Chances are if FB / Twitter / Instagram had high confidence that could
monetize their product with a subscription model averaging even $10/user a
year I think they wouldn't hesitate to implement such a model.

~~~
criddell
Yeah, I tried to give Twitter the benefit of the doubt. It's kind of
depressing to me that they are willing to make their product shittier to earn
a fraction of a penny.

I think comparisons with Facebook are a big part of Twitter's problem. They
aren't Facebook, never will be, and shouldn't try to be. If they use Facebook
numbers as a benchmark, then they are totally screwed.

------
udhan
As almost everyone is using twitter now a days for some sort of customer
support I am wondering why twitter isn't monetizing that aspect. Provide
businesses better tools and applications to manage support and charge premium.
Similar services can be offered to govts as well.

~~~
Animats
That was kind of a fad a few years back, but many companies have backed off
from it.[1][2]

[1] [https://consumerist.com/2012/12/06/charter-ends-twitter-
and-...](https://consumerist.com/2012/12/06/charter-ends-twitter-and-facebook-
customer-support/) [2] [http://time.com/3916355/social-media-customer-
service/](http://time.com/3916355/social-media-customer-service/)

------
collyw
I don't really see the point in Twitter. All of my friends and family are on
Facebook, but I only know a few people that use Twitter.

I am sure it only gets as much media attention as it does because of the lazy
journalism it allows - what's trending, Twitter's reaction, etc.

~~~
hobo_mark
Different use cases, on Facebook you friend the people you know, on Twitter
you follow the people you wish you knew.

Also, news (especially breaking news) and commentary from people who (mostly)
know what they are talking about is only on Twitter.

My use case is opposite to yours for example, as most of what is posted on
Facebook/Instagram is showing off to your friends and has little informational
value.

~~~
collyw
OK, not many people "I wish I knew", but I get your idea. I can still follow
"famous people" on Faceboook (though mine is limited to a couple of
professional kayakers).

I agree that Facebook is generally full of crap, but when I look on twitter I
don't see it being any better. The content seems worse due to the character
limit.

------
csomar
Ads -> Ad block. Especially for Twitter audience.

I wonder how many people are ready to pay for special stuff or accounts on
Twitter. Like a "Premium" account, or double highlights, or special sh*t.

But maybe, even if they exist, it is not enough to maintain a multi-billion
dollar company.

------
jetskindo
What I like is that everyone has a solution on how twitter should run, but no
twitter to run.

------
Negative1
A whole cottage industry of services exists to improve a power twitter user's
experience. The fact that Twitter does not have any significant piece of this
pie is surprising.

------
netman21
Twitter should just have implemented Google Ads ten years ago. They would have
made money from day 1. Google would have acquired them.

~~~
gherkin0
> Google would have acquired them.

And then perhaps shut them down...

------
BlytheSchuma
Twitter is suited more for a ZeroNet-type platform.

------
mamon
And here we are, 17 years later, repeating the dotcom bubble :) Of course
technology moved forward, now things like Twitter or LinkedIn or Badoo looks
much nicer than some random online shop or Kittler owner's forum from original
dotcom boom, but the principle still stands:

Lots and lots of people have been fooled into investing in companies that has
nothing but a fancy website and ridiculous dream to "change the world". And no
money in bank.

Put your life jackets on because Wall Street is headed towards another
iceberg.

~~~
m52go
Twitter has 412 years of cash in the bank, assuming current burn levels, debt
levels, and profitability.

[http://www.usatoday.com/story/money/markets/2016/01/25/twitt...](http://www.usatoday.com/story/money/markets/2016/01/25/twitter-
has-412-years-fix-itself/79301680/)

~~~
mamon
You misunderstood my point.

The problem isn't that Twitter will go bankrupt, because it might as well
operate for those 412 years as you said, no problem here. But if it won't be
making any profits then it's stock price can fall another 77 percent, or more.

Twitter's CEO and employees will be fine, but shareholders will loose patience
(and money).

EDIT: I've just thought of the way Twitter should proceed with it's business -
stop pretending it is a business in the first place.

Twitter should be officially converted to what it really is: charity
organization with focus on freedom of speech. This would give them some tax
benefits plus the possibility of raising money through donations.

------
alohahacker
It's all about target marketing. I remember some tweets I would make hundreds
of dollars and on most of my tweets I was getting $5-$10 epc. The beauty of
Twitter is the power of the warm leads in its search. If they can effectively
monetize that, there could be light at the end of the tunnel!

~~~
hackaflocka
People can make money from Tweeting? Really? Like YouTube creators? I had no
idea.

~~~
Falcon9
There's a whole marketplace of influence out there, if you only start asking
the right people. Want a cute but not overly bright reality TV star to tweet
about your handbag company? There's a price for that. Looking instead for a
popular recording artist to mention your viral video? Pricier, but very
doable. Of course, Twitter doesn't get a share of this money.

~~~
dexterdog
Which is why they should charge for usage above X followers. You can't send
unlimited emails to a 1mil person email list for free so why should you be
able to do your marketing for free on twitter?

------
giardini
Neither is Amazon:

[http://www.investopedia.com/stock-analysis/031414/amazon-
nev...](http://www.investopedia.com/stock-analysis/031414/amazon-never-makes-
money-no-one-cares-amzn-aapl-wag-azo.aspx)

~~~
SilasX
Please stop spreading this. "Reinvesting enormous profits in yourself" breaks
sharply from the common understanding of what "not making a profit" means,
even if technically correct.

Half the accounting industry basically exists to document how much taxable
profit you made "even when spending all the money that comes through".

~~~
pessimizer
"This" is an observation that Amazon makes no profit, and is obvious to
everyone. What you're spreading is Amazon P.R. about how no profit is profit,
and you have the burden of proof.

[http://cepr.net/blogs/beat-the-press/jeff-bezos-amazon-
and-t...](http://cepr.net/blogs/beat-the-press/jeff-bezos-amazon-and-the-lack-
of-profits)

[http://cepr.net/blogs/beat-the-press/franklin-foer-
confuses-...](http://cepr.net/blogs/beat-the-press/franklin-foer-confuses-
amazons-subsidies-from-the-govvernment-with-profits)

~~~
jvagner
"Profits are independent of investment decisions, at least if a company is not
engaged in accounting fraud."

Right or wrong, for good or worse, this author is being deliberately obtuse on
this matter.

Amazon generates profits and re-uses them before they're on the books as
profits. It's a tactical decision, and the letter of the accounting law
doesn't contravene their strategic decision.

If you don't like it, don't buy their stock. They've been at this game for a
very long time.. so, it's no surprise.

~~~
npizzolato
As someone ignorant of accounting law, it's not obvious to me why he's being
obtuse, and just saying he is doesn't add anything to the conversation. In the
other article, he goes on to say

"The people who say that this is due to the fact that they are investing in
building up their business are showing their ignorance. Reinvesting and
profits are two separate issues. Profits reflect the difference between
revenues and costs on current business operations. These can all be used for
investment in expansion (as opposed to being paid out as dividends and share
buybacks), but they should still show up as profits. Amazon doesn't show
profits or at least not much. This means that it costs them as much to run
their business as they are getting from customers in revenue. That is not
viable as a long-term model even if they are always expanding."

Both statements seem like reasonable statements to me (who is, again, ignorant
of the law). Is he wrong? Could you expand on why he's wrong?

------
fulldecent
Money gets into the ecosystem by ads (which I have found not to deliver ROI)
and paid influencers which have large follower counts. Paid Influencers are
paid outside Twitter and that won't change. The solution is to charge a usage
fee to people with a large follower count. If CocaCola is reaching 1 million+
people on the platform, or even Beyonce or Staw Wars kid, then I'm sure there
is a value to those people to maintaining that audience. This implementation
might not be the cleanest. Has anyone else seriously thought about ways they
might actually make this into a business?

~~~
Zikes
Large influencers are what attract people onto the platform in the first
place, which is where ads and the like are supposed to take over. I remember
when Oprah and Ashton Kutcher were battling to be the first to reach 1m
followers, they bought _billboards_ with their Twitter handles on them. The
amount of new users that must have brought to the platform must have been
tremendous, better than any other marketing efforts from Twitter at the time.

Twitter should be paying people with large follower counts, not the other way
around. If they start charging for that, they'll just take their massive
audiences elsewhere.

~~~
dexterdog
Where will they take them?

~~~
Zikes
What was Twitter before?

Twitter is where it is today in very large part thanks to the big names that
attracted new users. Wherever they choose to go then has the potential to grow
in just the same way.

