Twitter Shares Drop as Pace of Growth Slows | Hacker News Reader

Twitter Shares Drop as Pace of Growth Slows

bloomberg.com

33 pointskpeel58 comments

> It also lost both its chief operating officer and chief technology officer, increasing the load on Dorsey, whose time is divided because of his other job -- as CEO of Square Inc.

I find it interesting that the CEO of Twitter has two jobs. It's really in line with our future of a "sharing economy" where one job isn't enough to survive. It'd be funnier if it was Travis Kalanick (Uber CEO) but this is pretty good too.

Now joking aside, why the heck do investors allow the CEO to have a second job? If I were an investor at either of those companies I'd be pretty pissed off. Unless there's some magical synergy that can be had between them (and for the record I don't think there is), this is bad news on both ends.

http://www.recode.net/2016/8/11/12417064/twitter-stock-owner...

>Add on the fact that much of the board is new, with little financial stake in the company. It’s possible they are loyal to CEO Jack Dorsey, who essentially appointed them, and don’t have the financial incentive to push change the way older, more frustrated investors might.

I like how the chart in the article you linked to has Steve Ballmer's job title as "Owner, Los Angeles Clippers".

Because they were desperate for someone to save the value it has/had and they figured 50% Jack is better than 100% anyone else

Hero worship. Jack has done what few else could achieve: he built two multi-billion dollar businesses.

The problem is that doesn't mean he can run both at the same time nor does it mean he's the correct long-term steward of both simply because he was there first.

It really falls on the respective boards to keep the situation honest, but nobody wants to be on the board that fired Steve Jobs again.

"The whole world is watching Twitter. While we may not be currently meeting everyone’s growth expectations, there is one thing that continues to grow and outpace our peers: Twitter’s influence and impact."

https://medium.com/@jack/twitter-q416-earnings-call-4574b01e...

I honestly don't see how they are growing in influence and impact. I'd say that if it weren't for POTUS tweets, most people wouldn't even notice any change on Twitter's impact.

Beyond POTUS, I've noticed a definite uptick in usage almost solely from politics. Lots more politicians engaging in this, and people realising they can talk politics through this medium.

I don't know how you take advantage of that to pay your bazillion engineers though

On the flip slide, politicians have been using Facebook increasingly (especially Facebook Live) for the same reasons, which isn't good for Twitter.

Facebook Live is not good for Twitter in terms of Periscope - Twitter's acquisition in 2015. Otherwise, Facebook still rules the roost for short real-time fast status updates.

Hey, it's not a zero sum game, right? More social media usage across the board, even if some goes to a competitor (and even then, I subscribe to Twitter != FB so I don't think it's an issue)

speaks volumes about their hubris

Uses medium.com instead of a tweet storm...

medium is a better tool for this type of communication. it was also founded by twitter cofounder ev williams.

I mean, that's exactly what they're talking about. You can't just exclude one of the most impactful topics of global discussion (US politics). The fact of the matter is Twitter has a tremendously disproportionate impact on US politics and US journalism, and by extension world affairs.

Let's say that for some reason POTUS decides to start using facebook instead. Then what? Yes, I'm not denying the impact of those tweets, all I'm saying is that is just only ONE user driving the impact.

Not just POTUS. You'd also need Congressmen/women, non-profits, journalists, etc.

Twitter is in the news all the time with POTUS, or something else. Talk show hosts like Fallon use it as a bit on his show. And yet it just can't grow. It's time to start charging the twitter faithful a WhatsApp style fee of say something small a year or monthly. I'd hate for twitter to go under.

Grow where ? Do people realize there are actual limits on growth because humans aren't infinite ?

I don't think growth necessarily means growing the user base.

Exactly I'm thinking growing revenue so as to not fold. Maybe though they never should have gone public. Maybe the business model just doesn't exist for them to be profitable and maybe people have moved on from twitter to Facebook and Snapchat.

319 million monthly active users. Say roughly half are bots that's still 150 million users and if only 83 million we converted to pay a dollar a month for a better experience (no ads, no bots, and some other value ad) it'd be another a billion in almost pure profit every year. I don't know. J just want the service to stay around though it could improve.

There are different flavors of growth. For mature companies, it usually means cash money and ARPU.

In the past this has been a sustainable theory. Growth in the physical world through railroads or petroleum were much slower and far less directly tied to a single person. So from the perspective of investors it seems like a reasonable argument. What we're seeing for the first time with Twitter, Facebook, and Snapchat is the maximum size that physics allows.

Sounds like a sure way to kill it off completely. Maybe if they just stop trying to add crap to something that was pretty much perfect the day it came out, they could just coast on whatever cash they're already bringing in.

It had no ads or other potential for revenue the day it came out.

They can sell direct access to the live stream of data at huge prices I'm sure.

I'm not surprised. Their ad product is just not that good. I spend $ on FB and it works. On Twitter.. gee, you can pay $2 per follower you end up getting. Organic is so easy on Twitter that you don't need the ad product.

I've spent thousands on Twitter ads (for my clients) in the past but am spending less and less these days.

Their new card design (ie, design of the ads) apparently is a magnet for unintentional clicks. Around 90-95% of clicks for my last campaign were accidental.* The crazy thing is that their support team knows about the problem yet they still charge you for those clicks as though they are legitimate, AND they still let people create ads in that format. I've since taken my (clients') advertising dollars elsewhere. No wonder their ad revenue has gone down.

*I can only assume they were accidental because Twitter showed, say, 100 clicks, and Google Analytics showed just 3 visits. Yet Twitter support insisted the clicks were legitimate. That means people clicked the ad (unintentionally) and, upon realizing it's loading a new page, left the page before it finished loading.

I was reading Twitter financials.

The income from operational activities is growing a lot (The news usually don't comment this), really good numbers, but as also the expenses. Selling/General/Admin. Expenses doubled, I suppose they are trying to find a way to make money, and they are doing it, but the expenses needs to stop growing. It also seems years ago they borrowed a lot of money to invest on firm, now they are paying constantly.

Impossible to know if this will be a good company to invest or not, but it is still very risky, as major disruptive IT companies.

https://www.google.com/finance?q=NYSE%3ATWTR&fstype=ii&ei=1X...

Twitter's tendency to ban and censor is either part of the problem or a sign of desperation. Either way, not good.

But isn't Twitter's unwillingness to ban unless in instances of overwhelming PR part of the problem? (i.e. the harassment issue that has legitimately driven away users)

It may be the case that it is simply impossible to serve too large a diversity of users out of one central service. Even ignoring the proximal political issues that people are thinking of right this second that are centered in the US, there's a lot of cultures in the world, with a lot of social norms in active conflict with each other, and a lot of nations who have various interests in enforcing those social norms and whose interests appear to be growing rather than shrinking. For a similar example, it is increasingly difficult if not impossible to run an international backup service housed entirely in any one country... you must have the data housed in an acceptable jurisdiction for your customers and there is no one jurisdiction acceptable to everybody. It may the case that Twitter's current issues are not an anomaly, but a fundamental aspect of trying to run an impossibly large service. Going back to those "proximal political issues", they may not be an anomaly... they may simply be a specific instance of an inescapable general problem.

Facebook is facing similar pressures. Their valuation still seems to assume they've got a lot of growth potential, but what if this circle can't be squared? It isn't hard to imagine the possibility that not only has Facebook more-or-less grown as much as it can, give or take some stragglers, but that it may even have grown more than it can sustain, in which case it is grossly overvalued.

but Twitter's bans tend to be quick and capricious and possibly automated, verses an agonizing PR decision

"Unfortunately, it’s a situation of investor indifference -- everyone is used to Twitter’s troubles by now.”

Could easily replace "Twitter" in this quote with a scary number of other public tech company names where investor indifference is going on.

I don't know all the reasons why we read this same fucking article every 3 months. I do think passivity in public markets and the rigged proxy voting schemes are letting bad things go on for too long. There is a fiduciary responsibility here. How long should a company and it's management get before you pull the plug and replace them. Maybe the next guy or girl will be worse than Jack. Who knows. But that doesn't mean he should have stayed this long.

Maybe we should learn from the President. 8 years max for CEOs. For better or worse. CEOs are people and other people can do the job. Get out. Stay on the board if you miss it.

Twitter probably gets more free PR (with the news about famous people tweeting) than just about any tech company out there. It's sort of found its niche as a nano-blogging platform for people others like to listen to. It's never going to get to the true social network like Facebook and others have achieved, but that's fine.

The issue is just that's it's a very bloated company. I still question why Twitter isn't just like 100 people in a basement somewhere. Their revenue isn't great but it's also not terrible--it's their costs (which is mostly people related) that's complete out of whack. In my interactions with the company they always felt very bloated relative to what they do.

>I still question why Twitter isn't just like 100 people in a basement somewhere.

Interesting idea. Has this ever been discussed on HN before?

ad infinitum

Most of their costs are RSU grants to employees. I'm not smart enough to price their true value.

I think, in a sense, Twitter is living up to its potential -- and it has a lot of potential.

What happens, however, when it doesn't live up to its benefactor's expectations?

What are people's opinions on the most optimistic case for Twitter (the business)?

They get acquired by the Executive Branch of the US Government and relabeled "The Voice of Freedom"? :-)

Haha wow. This is already the worst of all possible dimensions but that would be rich

Obviously (I hope) my comment was intended as humorous but given that Twitter now appears to be an integral part of the political landscape I could imagine a scenario where it was bailed out as simply being too important (rather than too big) to fail.

I wonder if there would then be a "revenue" model in charging other governments to use it?

This has a very 'China' vibe to it.

https://en.wikipedia.org/wiki/Voice_of_America

Might be best solution for government if Facebook starts blocking 'alternative facts'.

I think it's difficult to say; my guess is endless layoffs and a slow gradual slide into irrelevancy like Yahoo! - no-one is really interested who is young at arguing with strangers online.

Do we know of any companies in tech (apart from Apple) who got big, stopped growing and managed to turn it around? Will it be an amazing purchase that saves them (like Apple did)?

Yeah! But...how hard is it to cut it down to real bare-bones staff and still somehow manage to have $120M in revenue and way less costs? Or is it mostly server and processing costs from how real-time their platform is?

"But...how hard is it to cut it down to real bare-bones staff"

I'm sure you'd lay off the right people but it's much much more difficult than you think because everyone appears to be doing stuff. Let's say 3/4 people need to go - reviewing that individually is a nightmare for morale and very time consuming.

It also never seems to happen - instead companies take the easier road and keep doing a small minimal amount of layoffs because the big one is almost impossible and might lead to whole pieces of the site stopping working.

Even if you layoff the right people, morale of the others is going to suffer and you're likely to lose 10%+ of them too.

While it is probably the sanest objective in terms of "let's be real and honest about it", 120M or even ten time that is not going to cut it with their current situation as a tech unicorn getting to the end of their ride and trying to stop their valuation from melting.

For reference, They were still valued in the 30+ billions range mid-2015, and now barely hold above 10B.

payment and shopping integration and processing, higher quality video, expanded broadcasting, long-form content (a year ago Twitter said there were going to try longer character limits but I don't know what happened to that)

Twitter fills a niche.. it's not growing, but a pretty big one nonetheless. It's like classmates.com yahoo.com and other sites that are large, stagnant, but exist anyway because they fill a niche, have good advertising revenue, and have a lot of users.

Cut their staff by 75%, run a lean operation, stay profitable and be just an "average boring company".

Don't do anything and die a slow spectacular death.

Add more features and have their app to start competing with Snap, Facebook, WhatsApp, Medium... except I don't think they can pull this up.

I think the first choice is the best, get rid of Jack while at it, sure no Bozo CEO, but Jack needs to pick either Twitter or Square.

> Cut their staff by 75%, run a lean operation,

That would still leave them with close to 1000 employees. I wouldn't call that lean. They can cut deeper than that.

What I'd like to see: Twitter accept that they are largely done growing. Rather than chase after new users, they focus on their current users and focus on the core product. Pissed off investors dump the stocks, the share price plummets, and the founders take Twitter private.

Sounds good to me, the user!

Why don't they just put ads on their page like every other company? With all the embedded tweets as well as what the user subscribes to they know who the user is so they can show them relevant ads.

Funny how this thread is out of the front page. Either flagging or admins.

This is something that makes this industry look bad. Criticism is suppressed.

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