
Twitter Is Expected to Field Bids This Week - daschaefer
http://www.wsj.com/articles/twitter-is-expected-to-field-bids-this-week-1475621345
======
crabasa
This is a sad outcome, but once upon a time Twitter had a choice: be the
defacto messaging backbone for the Internet or compete with Facebook and be a
destination website/app.

They chose the latter and rewrote their TOS to effectively eliminate 3rd party
development on their platform. An entire ecosystem of companies, products and
tools was destroyed because Twitter couldn't imagine or articulate the value
of powering this backbone.

~~~
proksoup
They became the defacto place for public discussion instead.

The focus on 3rd party api's hindered that and would have hurt their growth in
that regard maybe?

Journalism happens on twitter first, it's where famous people talk to each
other, not facebook, yeah?

~~~
this_user
I am not sure I would call what happens on Twitter discussions. It's a great
platform for posting things that are easily misunderstood or taken out of
context due to their brevity. Then someone starts a witch-hunt, which in turn
sparks a counter-witch-hunt. In the end no one is any wiser, but everyone is
little more bitter.

I think the appeal of Twitter is feeling "in the loop" due to the real-time
nature of the service. But in reality most of the content is just meaningless
noise. It's hard to find any signal on that platform.

~~~
the_watcher
Plenty of what you mention is true and is a major problem with Twitter. That
said, there remain some vibrant, niche Twitter communities where discussions
do take place (the NBA comes to mind immediately)

~~~
remarkEon
Minor League Baseball as well. Speculation about scouting reports, and
potential call-ups is really fun. I'm a huge baseball fan (as I imagine many
here might be), and this kind of thing is just not talked about on
SportsCenter and it adds a human element to The Game. Concur about the NBA.
NBA-Twitter is awesome.

------
rayalez
Does anybody know why they have never tried to create a premium version?

I've just googled, looks like they're making $0.55/user/month [1]

I would have totally paid $7-$10/yr for no-bullshit version without ads,
focused on user experience instead of manipulating my attention. I bet many
other people would too. And I would use it way more actively as a result.

Why do neither twitter nor facebook offer premium/business accounts? It's not
like it would cost them users, many people can still use the free ad-supported
version....

[1] [http://qz.com/131932/twitter-average-revenue-per-
user/](http://qz.com/131932/twitter-average-revenue-per-user/)

~~~
untog
> Why do neither twitter nor facebook offer premium/business accounts?

Because it will cause their ad revenue to plummet. The users with money are
the ones advertisers actually want to reach, so if you let them opt out of
seeing advertising you'll just be left with an exclusive pool of users who
won't buy anything. And no advertiser wants that.

~~~
jerf
It still remains unclear to me how letting users opt out of making Twitter
$0.55/month by giving Twitter, say, $4.95/month is a bad idea. OK, so the
advertising rates go down... so what? Advertising rates are not what a
business is trying to optimize, revenue is.

Up to this point, the counter to this argument was basically "Well, what
Twitter's doing is obviously working for them". But that's not quite as strong
as it used to be now. How much money did Twitter leave on the table? It is,
sure, possible that it would have been a net loss for them. But now I think a
fresh look must be taken at the possibility that it would have been enough of
a net gain to ensure their indepedence.

Plus one must consider the second-order effects of receiving subscription
revenue. Might they have created a different and more valuable service to
their customers and made even more as a result? Advertising-based businesses
face the intrinsic paradox of trying to serve two customer bases at once who
have somewhat opposed interests. (Even ignoring the socially corrosive
influence of advertising incentivizing our smartest people to build the most
powerful spying networks in history.) It is still not determined to my
satisfaction that that is a stable business plan in the modern era.

One possible salutatory effect of Twitter's demise could be making the idea of
subscriptions reasonable again. If even Twitter can't monetize entirely on
advertising, who else can? Even Google and Facebook may be surprisingly
fragile to a disruption in the advertising space, which is nominally not
actually their business (even though of course it is). (The most likely
disruption would be the continuing growth of ad-blocking software, but there's
also the black swan possibilities as well.)

~~~
harryh
_It still remains unclear to me how letting users opt out of making Twitter
$0.55 /month by giving Twitter, say, $4.95/month is a bad idea._

$0.55/month is the mean for the entire userbase. The actual amount for any
particular user can be far more or far less (well up to .55 less) than that.

Users who are more likely to pay 4.95/month are much more likely to be worth
more than 4.95/month in advertising revenue.

~~~
theli0nheart
> Users who are more likely to pay 4.95/month are much more likely to be worth
> more than 4.95/month in advertising revenue.

Given the paucity of people I know who've made a purchasing decision based off
of an ad on Twitter, I seriously doubt that.

~~~
fasteddie
Few people think they know others that have made purchase decisions based on
online ads, yet here we have a hundred billion dollar worldwide online ad
industry.

~~~
mschuster91
> yet here we have a hundred billion dollar worldwide online ad industry.

... which is plagued with spam and fraud. Victims are both the advertisers
(who pay for ad slots that are viewed/clicked by bots) and the consumers (who
suffer from malware ads, un-usable websites because there are 30+ trackers, ad
brokers etc. on one single site, and higher product prices because the vendors
have to pay for ads). The only ones who profits are the countless middle men -
ad brokers and "big data analysis/retargeting" companies which kill user
privacy on a global scale while providing next to zero value.

We should, once and for all, simply massively regulate advertising and re-
think about how we as a society fund the services currently funded by ads.
Especially in media, where "real" journalism had to step back in favor of ever
more clickbait crap...

------
downandout
This will get downvotes here, because many HNers somehow see value in Twitter.
But I'm actually surprised that many people would bid on Twitter at anywhere
close to its current valuation of ~$17 billion. Here's one reason why:

Go ask any major affiliate marketing network how they feel about Twitter
traffic. Many of them have an outright ban on it - meaning it actually has
negative value to their advertisers. It simply doesn't monetize nearly as well
as the traffic from other social networks. Much like the average Android user
is worth far less to app developers than an iOS user is, the Twitter user base
is simply not worth much to people looking to monetize it. That's a huge
problem when asking someone to justify a $17B acquisition price.

~~~
mbesto
Very curious to hear from the HN crowd - do people actually see high ROI on
Twitter ads? I've personally conducted full scale Facebook ads for a consumer
product company with great success (very positive ROI) but almost literally
couldn't get anyone to buy product via Twitter ads. Where does that $2B in
revenue come from!?

~~~
Bedon292
I would suspect it might have something to do with promoted tweets and things
which drive traffic to their twitter/website. These sites are paying for the
traffic (which then earns them ad revenue) and seem to be happy with the
results. I have seen very few ads for purchasable items on twitter, just lots
of traffic driving.

------
lhnz
Kind of insane that they've reached this point.

Why didn't they attempt to monetise journalism by providing users of Twitter
with a subscription that allows them to skip the paywalls of big newspapers
and that could automatically aggregate the individual micropayments into a
revenue stream for the publishers that sign up? (This would make sense to me:
often an individual interaction is worth very little, but the aggregate can
find a buyer.)

Do massively funded startups get trapped into their original revenue-creation
strategy due to the original vision they sold investors? It looks like that's
the case, and if so that's terrible for manoeuvrability.

~~~
fredguth
Like a Netflix for News?

~~~
lhnz
Cheaper - and you would never hit a paywall or login screen again.

------
imagist
Good on them--it's a wise choice to get out before the bubble pops.

I've said before[1] that Twitter is the poster child for the tech bubble and
that people's opinion of Twitter is a good litmus test for people's
understanding of the industry. It sounds like Twitter's management understands
their position and is looking to get out while there are still people who
think Twitter has value.

[1]
[https://news.ycombinator.com/item?id=12564298](https://news.ycombinator.com/item?id=12564298)

~~~
gjolund
I view twitter as a canary in the coal mine also.

It will be interesting to see the consequences of a major drop in twitters
valuation.

------
trequartista
Kind of surprised Facebook is not interested or at least there's no news of
Facebook being interested. Facebook already owns social networking, messaging
and photo-sharing. Twitter would fit nicely into this portfolio as a niche for
breaking news. Plus this would be an amazing opportunity to build an
integrated user profile across all these platforms.

Wonder what the DOJ and the anti-trust guys would think of this though.

~~~
jimmytidey
My understanding (at least for Europe) is that since neither Twitter or FB
charges 'users', there is no market which they are considered to be
monopolising.

Of course they are in the advertising market, but there are not dominant
there.

~~~
sulam
If Google can fall afoul of European anti-trust regulators, a tie-up of FB and
TWTR absolutely would.

------
danso
Seems like a good time to be entertaining offers. With the election, Twitter
is at its highest relevance ever, the news cycle nearly runs to the rhythm of
Trump's tweets.

------
mrweasel
Why would anyone want to buy Twitter? Sure they have a great brand, loyal
fans, but pretty much no way to monetizing them.

It's pretty obvious that Twitter has access to tons of interesting data, I
just question if it's anything more than simply "interesting". While Twitter
is huge, it's not really ubiquitous enough that you can use it for measuring
things like effectiveness of marketing campaigns.

~~~
untog
How many news stories are there every day about a politician or a celebrity
tweeting about X? Just because it isn't monetisable doesn't mean it isn't
valuable to the right (media, probably) organisation.

~~~
mrweasel
It you can't monetise it, then how valuable it that data really? It doesn't
matter how valuable your product is, if no one is willing to pay.

Perhaps the gossip magazines should pool their money and buy Twitter?

~~~
untog
Monetisation usually implies end users paying for a product. I don't think
Twitter will ever get to that point. But a media company like Disney (who,
remember, own ESPN) could absolutely capitalise on the value of Twitter for
live sports, for example. It would be valuable _to them_.

~~~
mrweasel
Couldn't they do that now... for free? What's the benefit to buying Twitter?
If it's due to missing functionality they could probably just pay Twitter to
implement the features they're missing and it would be cheaper than buying
them outright, while providing a safety net in case it fails.

Right now you're suggesting that e.g. Disney is buying Twitter, for 17 billion
dollars, to implement an untested business case. The cost of failure in that
case is at least the purchase price of Twitter, that seems like a massive
gamble.

~~~
untog
Being able to control the entire direction of a company is a lot more powerful
than just paying them to add functionality. It also grants the ability to lock
competitors out of the service once you've proved the new functionality is a
success.

I don't think Twitter is worth $17bn, but we live in an era of excessively
hyped up and unrealistic valuations, so I have no idea what the correct price
actually is. Yes, buying Twitter is a gamble, but many acquisitions are.

------
w1ntermute
I hope Twitter doesn't get acquired by Salesforce - that would destroy it.

~~~
mc32
I have difficulty imagining Disney being any better, so I'm curious to hear an
argument for Disney.

~~~
jarsin
They will replace all the devs with H1b Visa holders, and then censor any
tweet calling them out on their illegal business practice.

* Edit removed the word "outsource"

~~~
SwellJoe
Does "outsource" mean something different now? An H1B holder is someone who
has come to the US to work. So, if they're working here in the US, in an
office in the US...how is that "outsourcing"?

~~~
jarsin
Because it replaces the job of the american worker with a foreign worker.

It's illegal to replace a job of an american worker using H1b Visa's.

Maybe insourcing is a better word :)

~~~
SwellJoe
There's probably a useful conversation to be had about whether companies are
using H1b talent to drive down the cost of technical labor rather than to fill
gaps in the talent pool (they probably are). But, wrapping up that
conversation in misleading language seems counter-productive.

------
_pmf_
The world's communication network with the most fan-out is being sold out
because its executives failed for 10 years to find a business model.

~~~
sidlls
Their business model was 1. Grow, 2. Grow, 3. Grow, 4. ?, 5. Profit.

It baffles me that they ever made it as far as going public. Its only avenues
of monetization are advertisement and selling user data. What else could it
charge for? Charging users a fee would kill it.

~~~
samfisher83
That seems to be mantra for a lot SV companies. Grow fast make the original
investors some money and then sell.

------
0xmohit
Verizon intends to pick up Yahoo!'s internet biz for 4.8 billion. Twitter has
a market cap of more than 17 billion.

Such are times.

------
DrNuke
Still Twitter is the fastest and the least spammed medium to follow the cream
of your / any technological industry: follow just a selection of very relevant
influencers or firms and you are done, you have a live coverage of news and
issues. Neat and passive.

------
jondubois
Twitter only makes sense for public figures. For regular people, nobody on
Twitter gives a crap about what you have to say.

Facebook is fundamentally better because you only get updates from people who
you know in real life - When you post something on FB, those people actually
care about what you have to say (interactions are bidirectional).

To the average user, Twitter is just a glorified RSS news feed. You read other
people's tweets, but nobody actually reads your tweets. The interaction is
mostly unidirectional.

~~~
pjc50
You're Doing it Wrong(tm) :)

I only got into twitter to follow people I knew in real life; I've ended up
following a lot of strangers and public figures and I've made a few friends
over it. My wife has made even more friends by tweeting along with TV,
especially Eurovision.

------
nyfresh
Had only they charged a penny for your thoughts

~~~
0xmohit
That would have reduced the traffic [0] significantly.

[0] and valuation as a side-effect.

------
markpapadakis
Sometimes things just don’t work out. Twitter certainly can’t be blamed for
trying all kinds of different ideas, either by putting their own resources to
work on them, or just acquiring other companies (Vine, Periscope, and many
more - see list here:
[https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...](https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Twitter)
).

They have a product that is very valuable to many people, but those people are
not enough, and the things Twitter tried just didn’t improve the situation.
They could expand and try to compete with Facebook, but that’s not going to
work and will alienate their current core users, they could reconsider the
140characters limit (ditto), they could just stick to offering the same
service in perpetuity with minor changes here and there, and hope for the
best, and that’s what they are doing. They need to expand their users base and
by extension increase their profits (more users, more ads served, and there is
this whole network effect to consider).

The fact is, potential buyers are aware of that implicit users-base wall
Twitter has hit a long time ago, and are probably not interested that much in
contributing their own ideas in order to succeed where Twitter’s many leaders
in the past failed to do. They should know that significant changes to the
product will morph Twitter into something else, it will no longer be Twitter,
and like I suggested earlier, Twitter doesn’t stand a real chance as a
competitor to Facebook and other emerging/established networks.

I love Twitter, I use it every day and it provides me with a lot of value. I
suppose it’d be best for me and others like me if they stay the course, so
that we can all use it like we do today, and hope one of their future ideas
will work out, all the while they are losing market share, and then
eventually, inevitably, agree to a sale. The alternative would be someone else
buys it now and Twitter will soon become something, and that will undo the
company.

------
Druthers
Twitter has 3,900 employees. Instagram had 13 employees at the time of their
acquisition. This is one variable that needs to be addressed in order to be
profitable. I find they have WAY too many bells and whistles. KISS. Now start
with a huge layoff.

------
randomsearch
Interesting that everyone is kinda down on Twitter. Shows how easily it is to
be swung by the mood in the media.

Twitter may not be worth $17 billion but it certainly contains a viable
business and even a few brilliant ideas waiting to escape and flourish.

------
annerajb
I got put off on using twitter for so long. It was till probably 8 months ago
I started using it. And was able to get over their character limit. (which was
mostly my reason for not using it)

~~~
SwellJoe
I tend to type too much ("I would have written a shorter letter, but I did not
have the time."), so Twitter has been good for me. Twitter has value in
teaching brevity.

------
6stringmerc
If Salesforce goes down this route I don't think it will end well for either
entity. Granted, I'm not sure I'd prefer Planatir Technologies to pick up
Twitter (not that they will) but from a business perspective I don't think
Salesforce should chase the kind of market - or whatever it is - that Twitter
has. I've had to use Salesforce on several occasions and as a relatively
recent Twitter user from time to time, I don't see constructive overlap. Could
be me, I know.

------
ohstopitu
I'm surprised they didn't start something along the lines of Reddit Gold. It
could have possibly helped cover some of the costs.

------
smpetrey
What if Twitter buys Slack, and rebrands as a communications company hell-bent
on connectivity ¯\\_(ツ)_/¯

------
rezashirazian
This is what happens when you have a part time CEO. Leadership always forms
the narrative and sets the tone for other employees.

When the CEO is not willing to put in 100% and ensure the success of the
company, you really can't expect much from the rest of the company

------
jacquesm
Let's hope the bidders will factor in 'change of control' risks because
depending on who buys it those could be substantial. Twitter is one of those
companies that may be worth substantially more or less depending on who is
bidding.

------
hans
always wondered why an open source service hasn't risen up and become partly
useful like twitter.

there was talk back in the app.net days with lots of wonder for what
developers would do with an open twitter-like system, with open clients, open
data etc.

imo it would be quite cool to have an open source content system like twitter
that actually maintains a live service, where the git project auto-magic
manages the production pipeline to live.

but imagine a fully open system providing tweet streams with little direct
corporate involvement.

(who knows how to fund the bandwidth etc)

------
PretzelFisch
I still kind of expect Microsoft to by Twitter. Especially after Linkedin.
They would get a massive amount of data for analytics.

------
gjolund
I'm constantly surprised that people still use twitter. Whoever buys them is
going to be taking on a lot of dead weight.

~~~
criddell
I think it depends on the intentions of the buyer. If they think they can grow
like Facebook, I think they are screwed.

On the other hand, if they work from the assumption that Twitter is done
growing and now it's time to focus on existing users rather than potential
users, they might do okay, depending on the purchase price.

------
omouse
there's a proposal to turn Twitter into a co-operative:
[https://boingboing.net/2016/10/04/proposal-turn-twitter-
into...](https://boingboing.net/2016/10/04/proposal-turn-twitter-into-a.html)

------
grandalf
It's interesting that Twitter is discussed in the media very often lately
thanks to Trump's tweets, but investors still seem to fail to see the world-
changing power of a broadcast platform.

Let's hope that something else emerges post-Twitter that is similarly
broadcast-focused, not real-name oriented, and lightweight.

------
wineisfine
Hopefully this will eventually bring an end to the GNip mafia.

------
sidcool
Twitter going to Google can be there only good outcome.

~~~
dwightgunning
I can see the sunset announcement already.

~~~
afandian
The most incredible journey...

~~~
throwaway40483
For the uninitiated:

[https://ourincrediblejourney.tumblr.com/](https://ourincrediblejourney.tumblr.com/)

------
ijafri
so twitter is basically demanding $100/user...

------
madshiva
Why share things that are not freely available on Internet? I don't want to
subscribe to read more...

~~~
jacquesm
Ironically, Twitter is up for sale _because_ there are things freely available
on the Internet.

~~~
madshiva
Internet was a way to share information, things, it was never for money. Money
destroy everything. Human Rights Council have stated "to condemn the
restrictions on access to information on the Internet" (A/HRC/32/L.20)

[http://thehill.com/sites/default/files/a_hrc_32_l.20_english...](http://thehill.com/sites/default/files/a_hrc_32_l.20_english-
or-30-june.pdf)

It's all about ethic and control of the source. If you can check the source,
you can't tell if it's true or not and also access to information should not
be limited by your money.

This make me sad the way Internet is turning to.

~~~
jacquesm
> Money destroy everything.

That's an analogue to saying that 'tools destroy everything'. Money is just a
tool, you can use it for good and you can use it for bad.

The 'old' internet is still there, underneath all the ad-driven cruft, but for
some reason the majority of the people active on the net prefer those ad
driven services. I'm not one of them but It's hard to ignore the fact that you
- and I - are not in the majority here.

As for being able to check the source, that hasn't been true in a very very
long time except for scientific publications (and even there you have to check
to see who funded the study).

------
tarancato
Semi-offtopic: this is what the front page of Twitter looks like for me.

[https://lh3.googleusercontent.com/-s5LeMVvmcJ0/V_UeJYgxG6I/A...](https://lh3.googleusercontent.com/-s5LeMVvmcJ0/V_UeJYgxG6I/AAAAAAABDfg/x4Hih6tzpco/s0/2016-10-05_17-36-50.png)

There's this and two more tweets, in rotation. They are three sports-related
Tweets from two years ago, with that shit image quality, and what's even more
amusing: since I'm based in Spain, they believe I'm interested in Argentinian
football, probably because I speak the same language (but Spaniards usually
know absolutely nothing about sports from South America, neither are they
interested in that).

Even better, the cookie use banner moves the tweet down, making it overlap
with the footer.

And this has been like this for two years already. I guess nobody ever logs in
in the company?

~~~
sulam
The logged out user experience was a topic of discussion since before I
joined, and I spent over 4 years there and have been gone for almost 2. This
is the real problem Twitter has internally -- lots of interest in improving
things, but no intestinal fortitude to ship things, especially if they don't
A/B test well. The logged out home page you see tests very well at one thing
and one thing only: getting people to login. What it doesn't test well at (and
no alternative demonstrated better performance at) is getting people who don't
care about Twitter to try it.

My personal hypothesis is that Twitter is a ~500M user niche social network.
Which sounds absurd to me, because when I started using the Internet there
were ~15M people online, total. But there it is.

