As the article says, there are a lot of ways to explain why twitter R&D spending is a higher percentage of revenue. Microsoft, Salesforce, and Oracle are all sales-led enterprise software companies that would have much bigger sales teams and budgets. (Maybe google as well for part of their business)
I think there is also an element of trying to start fresh by ousting troublesome employees and focusing on core business, whether right or wrong. I don't think the layoff percentages that have been going around are based just on returning to industry norms
"industry norms" was my initial inspiration: maybe Twitter is not a tech company at all, and the industry they're in is actually "media." So what are those norms?
So I got the News Corp. annual report. As I said, they seem to account for software costs differently than the companies I showed, so I gave up. It would still be worth some deeper analysis, though.
The standard tool in the financial analyst's toolbox is to ask: compared to what? Hardly any company is identical to anything else, so you can always question the comparability of any pair. Accounting is a herculean attempt to make everything comparable, at some basic level.
So what should we compare Twitter to? Comments in this thread seem to be either "not those!" or "let's pick one that has a similar number (Facebook), and that's our comparable." Neither of those approaches are really rigorous.
I think maybe "a new-age media company" would be a good description of Twitter, rather than "a tech giant." Maybe the merger of Time-Warner with AOL was just 20+ years too early, and Twitter and News Corp. really do converge to become similar businesses.
I just realized I missed that you included facebook in your charts, and they do look much more in line with twitter, and to first order their businesses are pretty similar, vs the other enterprise software cos
Feels like the easiest explanation is just that revenue is lower? Seems like "Percent of staff budget that is in department ____" would be more informative.
I think there is also an element of trying to start fresh by ousting troublesome employees and focusing on core business, whether right or wrong. I don't think the layoff percentages that have been going around are based just on returning to industry norms