Or to put it in analogy form. You give me $500,000 to buy you a Ferrari and I give you a Toyota Corolla.

You complain that I haven't held up my end of the bargain and I point out that the Corolla is a perfectly fine car that can get you from point a to point b and even has some strengths when compared to the Ferrari, so why are you complaining?

That's the point Twitter is at right now. They took the money to be something other than what they are right now. If Twitter wants to be just Twitter, that's fine, but you'll need to cut their 20 Billion market cap down to somewhere around a 3-4 Billion market cap, I don't have a model with me right now.

having said that, Twitter has some good things going for it.

  - Mobile Advertising numbers are up Year over year

  - Data licensing revenue is up

  - monthly active users are up

EDIT to the child comment, you are confusing revenue and earnings. There is a huge difference between the two:)

Twitter is a field you put some stuff in, and that stuff displays to everyone who follows you. Disregarding scale, the premise is very, very simple.

The difficulty stems from knowing who or what to follow.

It takes a long time to figure out who you want to follow, and Twitter doesn't have enough information about you to solve the cold start problem. I love Twitter because I'm constantly pruning my feed (and lists), and it's pretty great.

My mom joined Twitter, followed who Twitter recommended, got a bunch of generic PR accounts and celebrities, and doesn't use it anymore. Conversely, when she joined Facebook all of her friends and family started adding her. Her feed was now full of the people she loves (the value was already there), and she learned to become a fully participating user. That's why Facebook has 1.5B monthly active users (holy shit!).

She figured out how to use Facebook because the value was already there. She doesn't use Twitter because it's not. It's really that simple.

So Twitter goes public saying, "Look, there are all these people using Twitter already, we can fix this problem for people, then we'll grow way quickly!" They start curating for you, and it turns out it's not what you want, and no one cares. Wall Street is pissed that it's not growing quickly enough, and everyone starts freaking out.

What we're seeing is the freakout. Everyone trying to figure out how to "fix" Twitter. Everybody coming up with solutions. But no one has figured out the fundamental problem behind Twitter: You have to put a lot of effort in before you get any value out. There are only so many people in the world willing to do that. It will still grow, but it may not be rocketship growth. If you're private that's OK, but if you're public and you're not growing quickly enough you're going to get a lot of shit.

Is it not possible to create a social network where the product is the social network? Perhaps not. App.net attempted this, and wasn't able to generate enough money to both keep the lights on and pay its employees.

As someone who once founded a company that published game books, I'm acutely aware of the fact that people are rarely willing to buy content in this age of free information. So what, then, would make them willing to pay to be a part of a social network?

I've seen some people on HN commenting on how the "responsibility" of funding R&D seems to be shifting (somewhat) from the public to the private sector. Surely this varies by industry (aerospace and defense is still hugely gov't funded) but it seems to be an increasing trend in the education, consumer goods, and healthcare sectors at least.

Twitter is not very profitable, but it is useful. Try to make it profitable w/ ads and dumb changes to a service that was fine without it, and you'll make it less useful. It's like taking a park and putting billboards on all the trees.

It would be interesting to see some sort of cost/benefit analysis from the gov perspective on whether or not to subsidize a public service like Twitter. We must do it for the large public energy companies we subsidize, why not for a network that (ostensibly) adds value to people's lives in a more abstract sort of way? If there was a compelling argument for putting our tax money towards Twitter rather than the DoD/NSA budget, I would at least be interested in hearing it.

Unless we start to think longer term about investing (50-100 years, not 5-10), we will be missing out on a ton of great products and services that investors shoot down with silly short-term monetization schemes.

Nope, because there no profit to be found. Twitter is to old a company to not make any money. Investors either need to stock increase in value or be paid a dividend, otherwise why invest?

Letting Twitter be Twitter clearly isn't making the investors any money, so of cause there's going to be suggestions to changes. At this point I think they should wait to see what Jack Dorsey does to be honest, and the article is written before he became permanent CEO.

It's a case of scaling too far, before your revenue model can catch up with your size, I think.

The problem with Twitter isn't that they're a social network on par with Facebook, it's that they're not on par as a business, and never will be.

I've got bad news for the author....

But then those same people say it is about teaching everyone else to do it the same way. But I am not sure that is true. Not everyone wants to see content in the same way. Just like not everyone read newspapers or watched TV news when they were dominant, people will have their own preferences. So the assumption that the market for Twitter is "Everyone on the internet." is flawed.

It seems to me that Twitter has simply reached its market capacity. Their growth curve has flattened. But they have significant revenue. They need to stop trying to change the product to grow their market, and start simplifying their internal processes and decreasing costs. They need to serve their existing market even better, while spending less money.

If they can do that, then they will move into the black, and start operating like a non-startup, which is not such a bad thing for a company that has been around for almost 10 years.

Even so, I can't imagine them becoming more profitable any time soon. Still a short if I had to guess (which I typically try to avoid).

You guys here on Hacker News don't seem to fancy Twitter so much and I wonder why..

That is, make it free for every user until that user reaches a certain level of influence. That way, you can grow without charging anything and then charge those who a) value it the most and b) have the money & reason to pay to sustain their influence.

Why can't Twitter create a pricing model for everyone with over 1m followers?

Why can't Facebook keep its service free for consumers but charge organizations?

The massive power of huge social followings (organic reach--without ads) is worth so much but valued at ZERO by social networks. I think it's a huge missed opportunity that is resulting in diminished value for everyone.

[1] https://en.wikipedia.org/wiki/Two-sided_market

At minimum it has to be free to get started, with the payment happening later as an add-on or up-sell. App.net put the payment up front, you couldn't use it until you paid, with the (predictable) result that nobody used it.

The model to look at is probably the tawdry world of "free-to-play" gaming on mobile, sadly.

If you're going to think like a government (well... a good one anyhow), you shouldn't be thinking about Twitter. You should be thinking about the category of things it represents. Is that category in trouble? Goodness gracious no, it's all but in a Cambrian explosion.

There's no compelling reason to subsidize the category in general, and even less reason to subsidize Twitter specifically.

Arguably the correct move is to definitively kill Twitter and show that "get really big, have vague hopes to show ads someday" is not a viable business plan, instead of it being in an indeterminate limbo.

So you’d have to do it like Germany, and the government would just have to buy at least 20% shares of all the big companies.

Effectively leading to a higher tax rate without anyone losing anything.