

Twitter revenue dilemma - kasunh
http://www.techcrunch.com/2009/09/09/twitter-and-the-revenue-dilemma/

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patio11
This is an absolute classic of Valley bubble thinking: once you have revenues,
its impossible for someone to buy you at a price totally unjustified by your
present ability to make money.

~~~
wensing
So the lesson is ... don't earn revenue?

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axod
1\. Don't monetize. Hype yourself up to make it seem that monetization is
trivial, but maintain that you're going for growth right now.

2\. Monetize and hope to hell it's not a disappointment.

Once you try something, it becomes a 'known'. And for several startups that
could be "we know we can't monetize this very well".

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gfodor
This is so unbelievably backwards. If there are conversations actively going
on inside of Twitter or any organization about if it is a wise move to start
making money, they seemingly have missed the point of running a business.

At the end of the day if there is some magic switch Twitter can turn to start
generating revenue, they'd be fools to not turn it on. Say what you will about
ridiculous valuations, but its a much stronger negotiation card to have in
your deck at acquisition time if you are actually you know, generating money,
and don't need to sell the company because you will run out of cash otherwise.
Until then, Twitter runs the risk of the world basically realizing (or at
least thinking) the emperor has no clothes and running out of cash before
getting bought by someone still drinking the kool aide.

~~~
dolinsky
_pre-revenue stream_

    
    
      Here's a shiny black box that can potentially solve all the worlds problems......
      Our growth is tremendous, so get in now while the escalator flies to the moon!
    

_turn on revenue stream and the revenue plateaus at a negative cash-flow
position_

    
    
      Here's a shiny black box that ain't makin' us money. Who wants to buy it?
    

It's not too difficult to understand why a company with tremendous (most of us
here would say overhyped) growth is afraid of generating revenue that doesn't
come close to matching the hype (I mean growth).

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jsm386
_The company has to decide whether or not to turn revenue on. It sounds
ridiculous, but it is a real decision. Once revenue is on, how the company is
valued by the market can change dramatically._

 _So when Twitter talks about turning on revenue, it isn’t such a small
decision. They have no idea how much money they can make off the service.
Selling data to search engines, display ads. Search based ads.
Premium/business accounts, etc. There are no comparable revenue streams at
other companies that they can fully rely on._

I think the more accurate revenue _dilemma_ is how any of those items
mentioned above are going to generate meaningful revenues.

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nick-dap
Turn on revenue? Did I miss the point where they actually discovered how to
make a profitable social networking service?

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adrianwaj
Interesting post. Explains why they may not put ads against their search page.
People will think:

"okay, is this the best thing they can think of"

or

"do they need the money?"

or, as the article says:

"whatever they are making, that's about all they'll make unless they grow
more"

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figital
I'd bet they're making quite a bit of money now just in licensing fees to use
their logos (among many other possibilities they're not going to reveal).

