Why did Institutional Venture Partners and Benchmark Capital just plow $35 million into Twitter? I talked today with Todd Chaffee, the partner at IVP behind the deal, and asked him just that. His answer:
Our model is to find the winners and market leaders that are going to grow at a disproportionate level. Twitter falls in that category. Twitter is bigger than a lot of people realize and growing faster than a lot of people realize, but it has not hit the mainstream yet. It is just starting.
To Chaffee, Twitter is a new type of media property, pure and simple. He (conveniently) puts it in the same category as YouTube or Facebook. The bigger it can grow and the more addictive it can become, the more opportunities there will be for revenues from advertising and other sources. He says:
From a business perspective, it is a media property that is growing very quickly. These newer media properties that have emerged are massive compared to older media properties.
[Some people say] Twitter is whatever you want it to be. But at the end of the day you have this open, one-to-many network, and to enable that is this platform. But who cares? The reality is that it is a network/platform which has millions of users and thousands of applications.
Twitter does three things. It facilitates social connections with friends, colleagues, writers, and celebrities. The second is knowledge transfer. It is a real-time mechanism for tapping the wisdom of millions of people. The third is social expression. It is a mechanism for the global community to express itself.
Sounds good, but how will it make money? Chaffee is not so worried about that just yet:
I love that here is this cry for revenue generation out of a company not even two years old, Relax, it is coming.
But what gave him the confidence to invest? He ticked off four characteristics of Twitter that make it a potential game-changer.
- Open. That makes it easy for others to build on top of Twitter and it also makes it searchable.
- Real time. It is a huge database of what is happening right now.
- Ubiquitous. You can get to it from just about any device.
- Scalable. (Don’t laugh)
- Persistent. It allows for an archive of what is happening and what has happened, which is searchable (see No. 1).
Chaffee says:
[Twitter is] the only thing we’ve found that has all of those things. None of the other things out there—Facebook, YouTube, LinkedIn—has all of those variables. That is why Facebook tried to buy them.
With more than $35 million in extra cash now in the bank, Twitter has a lot more time to figure out which business opportunities to pursue. For now, it’s investors just want it to keep growing as fast as it can and make the jump from early adopters and celebrity users to the mainstream. But there are several money-making avenues it can pursue, from real-time search to premium marketing services for brands.
But it doesn’t make any money…
I don’t think it’s hard to make money with with a service like this, they’re just being careful to choose the right approach. Right now Twitter is like a crowded mall without any shops, the opportunity is huge.
–
http://twitter.com/ElbertF
Oh dear, the metaphors are coming out again.
As I wrote in my blog, a metaphor is not a business strategy. It is a literary device that belongs in high school English class.
http://smartbab...ategy-save.html
Whenever you hear someone evoke a metaphor to describe their business, you should run for cover.
Because it usually means that business is headed in one direction. And it’s not up.
Anjali Sen
Oh dear, the please visit my blog are coming out again.
Your blog sucks
These metaphors ARE really stupid.
A crowded mall without any shops?????
If you can show me that your revenues > costs, I’m happy to listen. When you talk about eyeballs and crowded malls and communities, then you can take your spiel elsewhere.
At least in the 1999 some of these companies went public and had some killer parties.
In 2009, they will just die. Good riddance.
Been there. Seen that.
Warren Buffett is the master of the Metaphor. I think he does ok
http://www.yout...h?v=DfuXKpMFUjc
Personally I think you spend far to much time on TechCrunch with your breast hanging out picture, trying to get people to your Blog with looks. Twitter will make a killing and it may even kill Facebook and MySpace as people realize that the Internet itself IS a Social Network. Think about it!?
Twitter is my favorite online service at the moment. It gives me TONS of traffic and great quality personal connections.
I enjoyed that metaphor. well put.
“Right now Twitter is like a crowded mall without any shops, the opportunity is huge.”
That’s just a dumb metaphor that doesn’t make any sense.
Why would a mall be crowded if there weren’t any shops? A huge empty building would be a warehouse and I’ve never seen a crowded warehouse.
Yes that is stupid:
IRC is a crowded mall with no shops! Let’s invest 100 million that the California Retirement Fund gave us in IRC!
alt.binaries.pictures.porn is a crowded mall with no shops! Let’s put some of the money that the Vermont pension fund gave us into that!
With onset of mobile it is
1. Open.
2. Real time.
3. Ubiquitous.
4. Scalable.
5. Persistent.
What a bunch of idiots.
A crowded mall, except that they aren’t customers, they’re all business owners, managers, and speculators.
… so that’s why it’s a donation! I wonder if they got a tax receipt?
It is another silicon valley echo chamber crap…
.. and will never make money..
The Twitter models just does not work as a global centralised model.
Yes people will want it, but only on their terms. Anything at all that annoys them. its a goner/done.
The only way this will work is as a paid service.
However, as a single service by a company that only supplies twitter. No. it will never work.
As part of a phone plan or internet service, in which a commercial relationship already exists and adding $1 per month to the service cost. This makes sense as its cheap and has no transaction costs as its part of a bigger pie.
As its a paid service, it only does what the end user wants and as such, they are not going to abandon it as anything that annoys them is their own decision.
Twitter will eventually federate. Look at IRC.
IRC is a good example on a smaller scale of what is likely to happen to tritter.
James
Twitter is not the value creator. {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/ZQm25Dqcdg_th1.jpg”}”title”:{”value”:”Twitter is not the value creator. ”}”videoUri”:{”value”:”http://www.seesmic.com/video/tcUlKBBs0u”}}}
so basically they see twitter as a minigoogle
How is it in any way a minigoogle?
A jumping point to seek and discover information.
http://www.busi...estruction-goog
Certainly a valuable prospect.
No the valuable prospect in Google is AdSense and Adwords.
A library is a fine jumping point to seek and discover information.
And I thought we’re done with this sort of “shot in the dark” investing. I guess times aren’t as bad after all.
I agree that it was a good investment despite the revenue model still yet undefined. There is no shortage of ways to monetize when you have an addicted community.
We are working with Twitter now as well to extend what it does into audio community, and boost the radio industry into new territory.
Look for the audio tweets @cellecast !!!
Andrew: Just because you are working with Twi….. does not mean it is a great thing…another shit from the valley
There’s apparently always going to be a few select businesses out there that can attract funding based on the story they have, and a combination of knowing right people at the right time (luck? serendipity?) without regard to having to make money.
Very few of us reading TC or other geek porn (!) will ever be associated with these companies, and instead have to focus on being profitable from day one.
“I love that here is this cry for revenue generation out of a company not even two years old, Relax, it is coming.”
That’s classic. I know Twitter is cool, useful, and likely a game changer, but take that sentence and apply it to just about any company or situation you can think of, and it’ll sound ridiculous to anyone outside of the VC market, or perhaps outside the Bay Area.
“What? *generate revenue?* We’re not even 2 years old yet! I shouldn’t have to think about generating revenue for at least another 2-3 years! After that comes the notion of profit, but that’s probably 5-6 years away still!” Utterly outside the scope of reality for 99.999% of the people on the planet.
Yet somehow this is likely viewed as the norm for most people in our web/tech industry, and something to aspire to. Sure, we’d all love the winning lottery ticket, but it ain’t gonna happen for most of us.
Didn’t part of our current global economic crisis come from people borrowing money who had no hope of being able to pay it back? Yet the current VC model is 100% based on “9 out of 10 investments will lose money, but we’ll hit a homerun with #10!”
Nothing against Twitter – I use it all the time. And want to see them become successful and stay around. It’s just constantly amazing to me to see deals like this go on, and somehow the people involved seem to think we on the outside just don’t “get it” like they do. Revenue? Profits!? They’re not even 2 years old!!!
“Didn’t part of our current global economic crisis come from people borrowing money who had no hope of being able to pay it back?”
No one is borrowing any money in this case. You are welcome to think it is a poor investment, but to suggest this kind of activity has anything to do with the economic crisis is incorrect.
This kind of activity has everything to do with the economic crisis. Too much focus on selling companies to investors rather than products to consumers.
Actually that is not true.
It all falls under the general case of capital misallocation.
This was the cause of the first tech bust, when capital was misallocated into companies (not that different from twitter) that had no business model altogether.
Remember Webvan? Bluemountainarts? Boo.com?
VCs raise money from university endowments and retirement pension funds. When these investments go down, the retirement pensions of millions of people go down. They then need to pull their money out of other areas of the economy.
This kind of activity does have a lot to do with the state of the overall economy.
Anjali Sen
http://smartbab...ging-world.html
VCs only receive a small portion of those endowments. Sure those funds of “millions” will go down, but relatively small compared to the overall size of the funds.
Capital misallocation and perverse signaling.
It sends a signal to other people to build more stupid companies that make no money, and lemming VCs hop on board.
Until it all crashes. Like after 1999.
Most loans (personal and commercial – real estate especially) are considered “investments” of some sort, and packaged and sold as such. That contributed greatly to where we are now. Yes, they are ‘loans’, but also considered ‘investments’. The people ‘investing’ in Twitter are pretty darn sure they’re simply loaning this money out and that they’ll get paid back. It’s not structured in a typical ‘loan’ fashion, but they do expect to get their money back, and then some. Whether or not Twitter has any real chance of actually paying that money back is a different story.
It’s easy to make such investment decisions when its not your own money. If this guy plowed down $1M of his own money then I would say OK. But, he did not. He plowed down millions of dollars from Teacher pension funds and other retirement pensions. Let’s hope it works out.
“same category as YouTube or Facebook”
YEA RIGHT – Both of them are loosing money at “disproportionate levels”
Good Luck Buddy.
Funny. That’s what I thought too. YouTube got bought at the top of Bubble2.0 when companies didn’t care about blowing dollars for channels. Good luck seeing that behavior again in the next five years.
Because VCs are sheep. They wait till something explodes and then they and all the other VCs invest huge amounts of money.
Here’s the main question I’d like to ask. Why does Twitter need all this money? The software can be written in a month. They don’t yet have that many customers compared to someone like digg, and it looks like they finally hired someone to admin this thing so it doesn’t crash every other hour.
So why do they need $35M plus what they raised previously.
For Boats and Hoes
Best. Reply. Ever.
The Board of Directors’ salaries.
And servers.
Funny.. after my last comment, I went to Chafee’s site and looked at their investment criteria:
IVP is dedicated exclusively to investing in high-growth media and technology companies. We target investments in companies with the following characteristics:
* Large, verifiable market opportunity
* Exceptional management team
* Innovative and scalable technologies
* Rapidly growing customer base
* Proven business model
* Achievable profitability targets
* Defensible market position
* Accelerating revenue greater than $10 million
The Twitter deal fails on at least 2 of these. Not a complaint, just an FYI for other entrepreneurs.
What a bunch of idiots.
It is easy playing around with other people’s money. What type of IRR do you expect on this series C?
Well given that there will be no IPO anytime in the future, corporate buyers have gotten a bit tired of the no-revenue business model, and the only one who may buy will only offer illiquid and fast devaluing shares …
in this case revenue is in the eye of the beholder. I see fazebk as a fancy twitter. maybe they can become a social network and convert users to twitterers. problem…. all other fully established social players already have or will produce a twit style mechanism that will render twits social growth agenda useless. i would like to see twit render text messaging from phone companies useless. how they charge for texting is ridiculous, even with a internet data plan. maybe they can be the skype of mobile texting?
It’s got to be tough investing in this arena. By the time a firm is a superstar you probably overpaid. If you buy in early you are might as well just put it all on black. They may have successfully caught the middle with this investment if Twitter continues to grow. As twitter and one-to-many social networks increase in complexity, consumers will have to stay updated with security and privacy issues like justaskgemalto provides.
I am still not getting this whole twitter business model, i use it all the time, but i would also love for them to at least start making some money.
4. Scalable. (Don’t laugh)
haha, sorry, i laugh out loud on the second i read it.
Wahooo, we’re still in the bubble!! I was afraid it was popping.
Yeah I laughed loud enough for cube neighbors to look up.
Unfortunately, this type of investment, makes it more difficult to monetize, as the focus becomes isolated to ROI and less about the development or advancement of the product itself.
I’ll give you 35 million and you’ll give me control, equity, a seat on the board of directors AND a nice cushy seat, I like to call the “Bitch Chair”.
Facebook status updates… and eventually their own version of Twitter will make this obsolete. Stupid investment.
+1
yeah, it seems easy enough; when is facebook gonna handle it.
I like to apply the Buffet “Moat” principle to this kind of situation. Status updates/notification services can be replicated, but Twitter is a growing and strong brand.
I hope it works out well for them.
How does Facebook not meet the 5 listed criteria?
1. Open – Has an API
2. Real Time – status updates, pictures, news feed
3. Ubiquitous – mobile + pc
4. Scalable – seems so
5. Persistent – photographs..
It’s VC logic: “What I say must be factual.”
I agree, Facebook does meet the 5 listed criteria, but it’s obvious Facebook doesn’t see any value or could recreate it on their own and have no true need for the hype.
How did bluemountainarts fare on the 5 criteria …
well enough to drive Excite at home to bankruptcy.
Idiots.
twitter is way more open than facebook. I think the statement was true in a relative sense.
It’s a database of junk. Good luck.
okay, so it’s a new medium? sure, and so facebook is quite large as well – can you show me the money at facebook yet? i’m really quite confused….there’s a bigger opportunity to clone twitter for private utility, which is effectively what’s going on already within every social utility (from webmail and facebook to evite and flickr)…seems a bit absurd, but guessing this puts the valuation around 130-160M
Its called the Web 2.0 bubble bursting,
Some of us have moved on to the Web 3.0 already.
The same as there was a Facebook to come along and take the thunder away from MySpace, someone right now is launching an application to take Twitter’s hype away overnight.
The web game is the web game and can’t hate if the Twitter guys got a couple of mansions out of their deck of cards, kudos for them. It’s just a shame how many really innovative startups will suffer from the funding freeze following the coming Web 2.0 burst.
Awesome guys!
It’s funny how clueless VC’s like to throw money away…
VC’s only care about money. Time and time again, it’s proven that they do not have the best interest of the product – or the team behind the product, at heart.
Behind the “back door” deals and self indulgent promotion, it’s all a huge gamble.
A nice formula for calculating this is:
Egos = Greed = Entitlement = Fail
This is actually good, because now I know I will get at least $55 million for my company.
Buyer: ” We offer you $20 million buyout”
Me: “Are you kidding, we revolutionized our niche and Twitter got $55 million in funding without making a dime.”
This is good for stat-ups that are generating a profit trust me.
But you don’t have the sexy appeal of a company name that’s also a verb. AND – if you’re already making money, it’s easier to valuate you, and harder to come up with astronomical “maybe one day!!!!” pie-in-the-sky numbers.
Hey Mike maybe your right,
We are changing our name to ZENIS!
lol.
I agree Mike. I have been feeling uneasy about all the pride I had in our business model from the beginning. It certainly hasn’t worked in our favor, and takes all the mystery out of it.
Can’t tell if you’re being slightly tongue-in-cheek or sarcastic or dead serious
But look at you! You have a business model that encourages people to give you money in exchange for a service. How can you expect anyone to take you seriously?! How do you ever expect to raise money if you’re already, well, you know, making money?!
hmm think ev and the gang have anything to do with the investments?
didn’t they ‘turn down’ a $500mm (or was it $250mm?) offer from Facebook?
While that offer is in itself pretty stupid from an investment point of view, what’s even dumber is them turning down an OFFER FOR $500 MILLION!
Quite the business model… launch and grow for a few million in funding then sell out to a bigger fool for 100 times that.
But no, they turned it down and instead invested another $35MM for a company that makes no money now.
Maybe they’ll make it up on volume.
They did not turn down 500 million. They turned down highly illiquid paper which another Facebook’s vc said was worth 500 million.
Obviously Twitter’s VCs said that’s just a load of toilet paper.
At the end of the day there are really only two ways to monetize your site:
1. Sell a product/service
2. Sell advertising space
If, after all this time, they end up slapping ads on tweets, no matter how creative or different the implementation, I think people will become disenchanted.
I think what they’re going to do is find a way to charge businesses to use Twitter as a marketing tool. Offer “pro” accounts with analytics and other goodies. I’m not even sure if that would work though.
Frankly, I’m skeptical they’ll ever find a way to make Twitter self-sustaining and retain all the things that people love about it. It’s about as simple as software gets and that I think that’s a large part of the appeal.
“Our model is to find the winners and market leaders that are going to grow at a disproportionate level”
What market? Do you mean the market for magical-blogosphereic-twitterati-karma points?
Last time I checked, that market amounted to about…$0.
Interesting to see how the VC’s justify investing in this non-business.
“Our model is to find the winners and market leaders that are going to grow at a disproportionate level”
That is why on their homepage, their showcase investment in the Internet search space is …. Ask Jeeves?
Anjali Sen
I belive twitter would become bigger than facebook or other social networking sites. He is still babby..Need to be developing..
I can’t wait to never remember twitter in another year and a half. Seriously, mainstream? Twitter will never be mainstream, you see celebrities tweet like crazy for weeks then drop off. No one cares, no one says anything intelligent. I really just don’t see the point.
The ONLY positive spin I see from twitter is for live news as it happens. But, live-blogging is the same and provides more detail…again, just don’t see how this is the *next big thing*. A fad, like Digg, that will die a slowly and without much care.
“The ONLY positive spin I see from twitter is for live news as it happens.”
Not just live news but getting help in real emergencies. With so many people watching Twitter I could see a person getting mugged on Main Street, tweet about it, and in minutes a bunch of big guys could show up in their monster trucks with their baseball bats and beat the crap out of the mugger … and he wouldn’t have a clue that his punishment was coming so soon. So it’s possible that “good things” might come from Twitter, although I think they would be few and far between, and certainly nowhere near the value of the money VC’s keep handing them.
In my opinion the VC’s are conning their investors so the VC’s themselves can ride high for as long as Twitter continues to have enough money to avoid shutting down. It’s all a big scam as far as I’m concerned.
i don’t see it as a new medium or how it will ever become anything more than it is now.
i view twitter like an email list; except you can’t reply.
twitter is multi-cast instant messaging. like all messaging, it will be stubbornly difficult to monetize.
users are not open to advertising when they are eager to read a message from a friend or business partner.
Whenever venture capitalists invest more money, they see potential for a high return.
Watch out for ads and/or usage charges for high volume tweeters.
Benchmark just fucked over FriendFeed. . . I bet those guys are pissed.
googls next 1b deal. sory cuil ur not the future of search 2.0
Just because a business provides a space for social expression, it’s open, persistent and ubiquitous doesn’t mean it can make money. I have heard the “it’s coming” for revenue many times and it never came.
TODD – CHANGE YOUR WEB SITE!!
On your web site, in the page “for entrepreneurs” YOU wrote for investment criteria:
* Proven business model
* Achievable profitability targets
* Accelerating revenue greater than $10 million
It will take +10 years for twitter to break even, and my bet is that it has less than 20% to actually get there.
Now, to Marc Cuban’s requirement for investing in a start up:
1. It MUST BE CASH FLOW BREAK EVEN within 60 days.
2. It must be profitable within 90 days.
I vote for Marc.
Twitter is great, but it seems like my 401K will get a bit smaller from my in-direct investment in twitter (As usual, nobody asked me if I agree..)
I don’t have much of an opinion on the merits of the investment. However, I would guess that the recent round has a senior liquidation preference. Unless there was a complete flame-out, a downside sale scenario would most likely cover the amount of the liquidation preference. So IVP is buying an option, with a decent shot at a return-of-capital even if they’re wrong on the investment thesis. If I were a VC, I’d at least consider the investment. Where else are you going to be investing these days? (said kind of sarcastically and definitely rhetorically)
Well said, and I happen to agree with you.
Give me a fucking break.
The twitterfacebook circlejerk really needs to come to an end. When the fuck did creating a ‘business’ that has no revenue (nor likely any possible future of generating revenue) become ‘cool’. Only fucking now. When a bunch of dipshits who have never left under/grad/consulting businesses and their dipshit friends who have never created anything either suddenly convinced one asshole to give them money and like a bunch of fucking sheep/cows/lemmins/penquins the rest of the dipshits decided they had to get in on it…. What the fuck is it with people who can’t fucking think for themselves? I’d seriously back some fucking hick from Nowherefucking, Arkansas than some ass from the SF bay area. Seriously I’d do it, but I’m too fucking busy walking around with couple of pieces of paper asking real people, owners of actual, tangible businesses, whether they would use my services… and pay me to do so… fucking amazing. Getting real people, giving me real money, for a real service…. Yeah, fucking amazing… but I’ll never see any pr/investment/growth/techcrunch/twitter/digg/circlejerk… why? Because your fucking house of cards couldn’t stand for it.
Twitter has made a lot of money for cellular carriers, as subscribers have had extra incentive to upgrade their service plans to unlimited text messages. If Twitter ever was in danger of going away, they’d find a way to fund it. That the Twitter base in now growing exponentially proves it has increasing value to the user too (Metcalf’s Law).
Twitters traffic is de minimis as far as the carriers are concerned.
The carriers are doing 75 Billion SMS’s a month.
Other reasons he invested in Twitter:
1. It already had scale
2. It already had cash in the bank
3. The heavy lifting is over and I smell an acquisition
4. My friend VC’s invested too
Twitter can make money in the following ways:
Charge a subscription fee to follow/track celebrity tweets. Never, ever underestimate the American consumers fascination with fame and celebrity. Thousands of horrible gossip magazines are SUPPLIED at the grocery checkout counter everyday because there is DEMAND. Following your favorite rock stars, movie stars, sports stars, etc should become big business for Twitter. It’s live and up to the minute and connects the consumer to something of interest to them immediately. I think that means ringing the cash register for Twitter.
Eventually there will be two ways to get Twitter. Twitter with ads and Twitter subscription.
Twitter with ads will be a simple text sent to the end user for every (say 20) Tweets they subscribe to. It will contain offers from businesses to drive immediate purchases and a variety of branding messages.
Twitter Subscription will probably be integrated into your phone plan or via payment on their website. Why would people pay to stay with Twitter? Because everyone is on Twitter and its economy of scale and selection…similar to eBay.
What would a subscription look like? Unlimited of course, but also special delivery services where I could select perhaps a comedy channel where maybe 100 known and not so well known comedians get paid to Tweet and engage in hilarious exchanges. That would be a service I would consider paying for. package it up so its very simple and if it is genuinely entertaining, then it provides REAL TANGIBLE VALUE for the end user.
Bundling Twitter as part of a media package like a special code in a DVD or when you purchase tickets to a concert, maybe you could track the entire Twitter conversation of a band like U2 while they are on tour.
It’s endless.
“The second is knowledge transfer. It is a real-time mechanism for tapping the wisdom of millions of people.”
telling your friends you are having beer at your favorite pub – knowledge tranfer… hmmm – this is what you call “top shelf dung”….goes to show none of these new VCs have a clue either on why they invested.
If this genius had not written this commentary, perhaps we may have given them the benefit of the doubt. but nooo… he had to show his VC smarts (aka STUPIDITY) and write another commentary like the rest of the clowns who are buried in twitter (aka shitter). …. good luck suckers
Twitter is bubble .com
Where is the twitter storm around the airplane crash in Buffalo? Why aren’t there articles around how twitter was crucial in getting information to families and friends? Is it because real people don’t use twitter? Are twitter users snobs, and Buffalo isn’t important to them? I really am curious.
this is good to hear. i have friends who started http://www.iget2work.com and people ask them all the time ‘how ya goin’ ta make money?’ they repeatedly tell us ‘don’t bother us w/the details.’ i just started finding twitter interesting and it definately is a marketing tool. on iget2work’s site they have a twitter widget about layoff chatter and it’s rather interesting. (on their work news page). at first my friend’s said twitter was ‘republican’ but i don’t see that.
Beware of the Trojan Horse! $35MM for the luxury to explore revenue opportunities sounds irresponsible in these times, unless of course they already have the revenue model sussed out. I bet its the latter.
If you read between the lines you’ll see that twitter is building an advertising database. Their customer is not the consumer. Think about what Chaffee said:
“The reality is that it is a network/platform which has millions of users and thousands of applications.”
So it’s eyeballs and distribution channels.
If you take a look further and look at the list of 5 that Chaffee rattled off – 1,2, and 5 are repeats:
1. Open. That makes it easy for others to build on top of Twitter and it also makes it searchable.
2. Real time. It is a huge database of what is happening right now.
5. Persistent. It allows for an archive of what is happening and what has happened, which is searchable (see No. 1).
It’s all about the searchable database. They’re building a database in which they will sell to advertisers.
Finally let’s take a look at another quote from Chaffee:
“These newer media properties that have emerged are massive compared to older media properties. ”
So older media properties(TV, radio, newspapers, etc) don’t have the eyeballs that newer media properties have.
What is clearly happening is that Twitter is not being built upon microblogging rather their trying to build a new advertising model – micro-advertising.
This is what Chaffee means by the one to many model.
Congratulations to Twitter for raising that type of money.
In order to generate the revenue that Twitter needs to return profit to pay back and self sustain, there’s going to be a need for them to create MASSIVE value.
Let’s see if they can do it.
You’d think the dot com era would have taught people that business models matter. I would not put a dime in Twitter until the Twitter value paradox was solved:
http://broadcas...ue-paradox.html
In short, the more this company grows, the worse it is for investors. Eyeballs aren’t worth that much money, and Twitter is one of the worst-positioned social media companies to capitalize on eyeballs.
i couldn’t bear to read all these replies
but i estimate twitter to be worth 10 and a hundred billion dollars.
thx,
mal
Twitter will make money. The business model is obvious: mine data to find out who is interested in what and place targeted advertising.
Advertising.
Advertising.
Advertising.
I guess that’s the business model for everything nowadays?
Screw tangible products… just come up with some scheme to funnel online advertising dollars through the Googlepire and into your pockets.