Reddits Best Comments On The Collapse of Twitter

1 year ago Public Submissions 0

[–]Yare_Owns 

Reminds me of a joke.

One hundred million users walk into a trendy bar in Silicon Valley. Nobody buys anything. Bar hailed as massive success.

[–]real-G 6 points 6 hours ago 

I expect the arse to fall out of many tech firms in the coming years.

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[–]nagerst 1309 points 1 day ago 

They have almost no monetization and no way to get people to pay for the service. This “news” comes as no shock at all.

[–]EnterpriseArchitectA 448 points 1 day ago 

We lose money on every tweet but we’ll make up with it on volume! Seriously, this reminds me of the “new economy” nonsense from the 1990s where Internet companies thought they could somehow survive without making a profit.

[–]might_be_a_troll 181 points 1 day ago 

all we need is the right domain name and the customers will come to us without us lifting a finger!

[–]EnterpriseArchitectA 195 points 1 day ago 

Yeah! We’ll sell 50 pound bags of dog food cheaper than the neighborhood grocery store and clean up! Shipping costs? Who cares about shipping costs? Profit? We don’t need no stinking profit! Where are we going, and why are we in this hand basket?

This really happened in the 1990s and was followed by the Dot Com bubble bursting, AKA Dot Bomb.

[–]jncc 106 points 1 day ago 

Speaking of ordering dogfood … I ordered a couple of big bags from WebVan along with some other stuff. Everything came except the two bags of dogfood.

I sent an email when I get home to complain and they contacted me right away and asked me if I was home and I said I was. About two hours later a van shows up and delivers the two bags, along with some dog treats as an apology.

The next day they deliver two more bags, which I think was the two bags that were supposed to come the first time.

I email them about it and they said, keep them all, no extra charge.

I said “Thanks” [to them] and “This company is doomed” [to myself]

[–]skarphace 54 points 21 hours ago 

Nah, the loyalty they will get with that kind of service will pay off in the long run. Small price to pay.

You just have to not fuck up your orders in the future.

[–]Sororita 30 points 21 hours ago 

thats like when I went to a Smithfield’s recently, got the chicken tender plate, it took a little longer to come out than normal, but it wasn’t really long (i was told later the next batch of tenders took longer than expected.) shortly before I was done the manager came out and gave me a box with three more tenders and some hushpuppies. apparently they tenders they gave me the first time weren’t right out of the frier fresh (I hadn’t noticed at all.) He said he wanted to make sure his customers got the freshest food possible. I basically got another meal free, and they got a lot of loyalty out of me and spreading the word of their integrity and delicious food.

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[–]goetz_von_cyborg 11 points 20 hours ago 

Plus OP just advertised their service to DOZENS OF US!

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[–]SmartassComment 27 points 23 hours ago 

Oh yes, pets.com. I also remember boo.com, etoys.com, cdnow.com, and so many others. I actually was a customer of CDNow: they were pretty decent for a while there.

By 2000 it was all falling apart. I was an avid reader of fuckedcompany.com, until they too fell years after the dot com bubble burst, because they didn’t even have enough failure left to report.

[–]GoodAtExplaining 12 points 22 hours ago 

Oh my God, CDNow… I haven’t heard that name in such a long time!

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[–]chortle-guffaw 11 points 22 hours ago 

That was a great time for buying CDs. Lots of online sellers vying for market share by selling at unsustainably low prices. It also happened to be a time when a lot of excellent remasters were coming out, and initial releases on CD of less popular bands by labels like One Way Records. I loaded up the boat until it all crashed.

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[–]ImNotKennethAndrews 90 points 1 day ago 

We’ll sell 50 pound bags of dog food cheaper than the neighborhood grocery store and clean up! Shipping costs? Who cares about shipping costs?

And now Amazon it taking over the world.

[–]Bwob 86 points 23 hours ago 

Yes, well – Amazon spent time building up their logistics infrastructure into something truly incredible, and so actually CAN sell cheaper than the neighborhood grocery store (due to not having to maintain shelf-space, physical storefronts, etc), and CAN not care about shipping costs (because of aforementioned logistics) and is reaping the rewards of that now.

So like a lot of plans, it’s actually a GOOD plan if you do the work required to make it possible. But it’s a really BAD plan if you just jump straight to the end-game and assume it will work out, without spending all the backbreaking time setting everything up to make it possible.

[–]ohio_dung_beetle 14 points 20 hours ago 

The reference sounds like pets.com, who often sold things at below market rate to stoke sales. Once they burned through investor money and speculative funds, they were quite handily screwed.

They were the poster child for the “Step 2: ???. Step 3: Profit!” model.

[–]jjfjfjfj 5 points 20 hours ago* 

Amazon makes sense. They’ve developed new ways of doing business. (essentially making people redundant)

But in that sense, what has Twitter done?

It still operates basically the same.

[–]ender1108 3 points 20 hours ago 

That sounds like every business. Not just online stores.

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[–]Shapmandu 13 points 1 day ago 

this sounds like its being recycled as the Jet.com business model.

[–]ouiserboudreauxxx 23 points 1 day ago 

I don’t get Jet.com. I ordered a few things from there(because there was an Amex offer) and it came in 4 separate orders, with one thing actually being shipped from Amazon itself. Aren’t they supposed to be competing with Amazon?

[–]Shapmandu 20 points 1 day ago 

I had the exact same experience. all of my items were shipped directly from a third party, and after browsing their sites, found that Jet had likely eaten around 60% total. They charge you the price they quote even when they have to buy the item from a third party and take a big loss. as for their plan? it kinda made sense when they were going for the subscription model, hoping the very lowest prices on the web and eating huge losses would attract a large enough pool to lure into subs to generate income. That was quickly abandoned, and for now it seems they are going to pull a soundcloud and just burn through venture capital until they fold in 2020 or so.

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[–]dagoon79 5 points 18 hours ago 

Twitter sound somewhat familiar:

Dennis: I think we made every single one of our Paddy’s Dollars back, buddy.

Mac: You’re damn right. Thus creating the self-sustaining economy we’ve been looking for.

Dennis: That’s right.

Mac: How much fresh cash did we make?

Dennis: Fresh cash! Uh, well, zero. Zero if you’re talking about U.S. currency. People didn’t really seem interested in spending any of that.

Mac: That’s okay. So, uh, when they run out of the booze, they’ll come back in and they’ll have to buy more Paddy’s Dollars. Keepin’ it moving.

Dennis: Right. That is assuming, of course, that they will come back here and drink.

Mac: They will! They will because we’ll re-distribute these to the Shanties. Thus ensuring them coming back in, keeping the money moving.

Dennis: Well, no, but if we just re-distribute these, people will continue to drink for free.

Mac: Okay…

Dennis: How does this work, Mac?

Mac: The money keeps moving in a circle.

Dennis: But we don’t have any money. All we have is this. … How does this work, dude!?

Mac: I don’t know. I thought you knew.

Dennis: I thought you– WHAT? I thought you were on top of this!

Mac: You’re the one who came up with the plan!

Dennis: I– did I come up with this plan?

Mac: Last night, dude! With the D&B Power Club card and the–

Dennis: I blacked out. I blacked out that night.

Mac: Shit dude, I’ve been following your lead!

Dennis: Aw, Jesus… aw, shit. Okay, we–

Mac: We have no money and no inventory. There’s still something we can do. That’s still a business somehow.

Dennis: How does D&B’s do it? They’ve got a complicated system worked out and I cannot begin to understand it.

Mac: How does a self-sustaining economy work?

Dennis: I don’t understand how the U.S. economy works much less some sort of a self-sustaining one. I don’t understand how finances work.

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[–]Fatvod 59 points 1 day ago 

Yet it happens all the time. Snapchat could have sold for a billion dollars without ever making a dime. Your userbase is often your value.

[–]TurboSalsa 46 points 1 day ago 

Your userbase is often your value.

Only if you can find some way to monetize them.

[–]Fatvod 56 points 1 day ago 

If you are selling the app, thats not your problem.

[–]BoboBublz 19 points 23 hours ago 

It’s not selling the app, it’s selling the data gleaned from the userbase. That data can be used to adjust marketing tactics, or product features, and so on.

[–]gropingforelmo 16 points 21 hours ago 

I think he meant if you’re selling the app to another company. It’s still a thing for a startup to have no plan to profitability, and instead aim to be bought out before the investment money dries up.

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[–]Rock_Julio 3 points 22 hours ago 

I maintain that this will go down in history as one of the greatest blunders of all time.

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[–]themindset 12 points 1 day ago 

The one company I will always remember made free mouse cursors.

[–]SmartassComment 5 points 23 hours ago 

http://www.pimentoloaf.com didn’t last long, but at least we still have http://www.zombo.com!

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[–]doesntakethehighroad 115 points 1 day ago* 

Where Twitter screwed up is they didn’t get advertisers to funnel their paid product endorsements through Twitter instead of using 3rd parties. YouTube built a system for video content creators to share in ad revenue. A user posts content, they monetize it, and receives a percentage of ad revenue shown to users viewing the content. YouTube receives the larger percentage of the revenue share.

But, on Twitter it’s different. A Twitter Superstar creates content by tweeting. They sell product endorsements to a 3rd party in exchange for tweets endorsing their product. The Twitter Superstar receives a revenue share with the 3rd party, but Twitter is completely cut out of the deal.

Twitter tosses tweet ads into their content stream, but the tweet ads don’t carry the same weight as endorsements from Twitter Superstars. But, ads work on YouTube because they are video ads that deliver a bigger impact to motivated users waiting for a video. Tweet ads are easier to dismiss because they’re injected into the tweet stream of unmotivated, impatient users.

TL;DR: Twitter ads are weak revenue generators. Product endorsements are where the real money is at. Twitter should have built a marketplace for advertisers to bid on product endorsements from Twitter Superstars.


Postface: YouTube should have also done this, but didn’t have to because their video ads are effective. Twitter could change this overnight if they build a product endorsement marketplace. They would steal revenue back from 3rd party marketers because they have direct contact with their entire user base, carry name recognition and trust, and could seamlessly integrate the endorsement system with the tweet system.

[–]redditor1983 27 points 21 hours ago 

I like the way you’re thinking about this, but I don’t think what you’re talking about is really feasible.

How could Twitter enforce the policy? How could they discern a paid product endorsement from a personal opinion?

Think about it like this… Back in the day when shows like MTV Real World were popular, they always had to put black tape over the logos of the clothing that the stars of the show were wearing. (Maybe they still do this, I don’t know, I don’t really watch those shows anymore. I’m old, haha.)

The problem was, Nike (or somebody) would say to a star “Hey wear my shirt on the show and I’ll pay you” but MTV didn’t want to provide free advertising. If Nike wants to advertise on their show, then they can buy a commercial. So they taped over the Nike logos.

Your Twitter idea is the exact same dynamic: A company wants a star to endorse their product on the popular platform, but the platform (Twitter) wants a cut.

Except in the Twitter situation, it’s digital. It’s not just 30 minutes of film that they have to censor. It’s a firehose of millions of constant tweets.

The stars and the companies would always try to conspire to cut out the middleman. Twitter would be running around banning everyone constantly.

Plus, how can they tell if a star has been bribed? What if I’m a Twitter star and I get a brand new Dell laptop. I tweet a picture of it with the caption “this thing rocks.” I wasn’t paid by Dell, that’s my honest opinion. But then the Twitter police show up and say “Hey, we didn’t get any cut from Dell on that. Are you getting paid under the table??”

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[–]Esco91 13 points 1 day ago 

Exactly. But can they change this at such a late stage though, realistically? Can they suddenly turn round and ban any tweet from an official verified celebrity account that features a brand name unless they recieve a cut?

[–]doesntakethehighroad 15 points 1 day ago 

I think Twitter could dominate the endorsement market because they would have a significant advantage over 3rd party marketers.

  • Twitter can directly email its users and deliver to their inbox
  • Twitter has access to all statistics and user metrics
  • Twitter could employ advanced algorithms to pair endorsement offers with Twitter Superstars in ways that could maximize profit
  • Twitter has global name brand recognition and trust; they spent billions building the brand
  • Users tend to prefer simplicity and one stop shopping
  • These advantages could enable Twitter to give a higher payout percentage to Twitter Superstars, which in turn would become another advantage for Twitter.

[–]Esco91 8 points 1 day ago 

I agree, but if the number of fake users on the service is as high as I am led to believe, given that they (and the industry in general) have spent so long focusing on users numbers, the kind of switch in strategy we are talking about is a much bigger task than it would have been 5 years ago.

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[–]cynoclast 75 points 1 day ago 

Have you never scrolled through a timeline before?

Like every 5th “tweet” is a fuckign ad. They’ve “monetized” the shit out of it to the point that it’s garbage through the official app.

[–]locojoco 20 points 1 day ago 

the users monetize their tweets, but not twitter itself

[–]Mend1cant 41 points 1 day ago 

It’s not direct ads, it’s “promoted” tweets. Literally just opened the app to check and there was an ad for walgreens. If twitter is not making any sort of money from that, it’s amazing they’ve stayed up this long.

[–]PM_ME_LIMEWIRE_PRO 16 points 1 day ago 

The thing is they only launched that pretty recently. For so many years Twitter had literally no monetization on it.

[–]cynoclast 10 points 21 hours ago 

Tinder did the same thing.

It’s an ancient bait & switch scam. You have to build up a product (millions of eyeballs to put ads in front of) before you have something to sell to your actual clients (advertisers).

The cable TV industry did the same thing. Tinder did the same thing.

They waited until tweets appeared on mainstream TV and radio, then they started selling to advertisers.

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[–]locojoco 3 points 23 hours ago 

never seen one, I guess TweetDeck hides them?

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[–]Calypte 3 points 22 hours ago 

Only if you use the official app, thankfully. I use Plume and don’t see any in-feed ads.

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[–]Bourbone 19 points 21 hours ago 

Hilariously, I have a firsthand story about this from this morning.

Client: “we have $350,000 that we want to spend on Twitter or Facebook.”

Us to contact at Twitter: “We have $350,000 to spend with you.”

Twitter contact: “actually, we don’t work with numbers that small anymore. You should use self-serve.”

My company does millions in ad dollars every year with Twitter. This is $350,000 to spend between now and August for one of our many clients. Twitter Contact knows both of these things.

Me: “I guess you don’t like money then”. Dials up Facebook…

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[–]HotAsAPepper 166 points 1 day ago* 

I used to use twitter for my business promotion, marketing, and customer support, etc. At one time, I saw a value in it. I could have seen paying a reasonable amount. But now, not so much. It is destined to go the way of MySpace eventually, is it not, as people move along to even more simplistic methods of sharing, like, snapchat, or instagram.

Edit: I can’t, help it, if I talk like, Bill Shatner… =) bahahaha

[–]piedmontwachau 161 points 1 day ago 

I, agree, with your statement, like, others, here.

[–]CallMeOatmeal 59 points 1 day ago 

l,o,l

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[–]megablahblah 44 points 1 day ago 

Twitter, snapchat and instagram all completely different uses. I don’t think any of them are making money, so outside of being subsidized by Facebook, they would all go away.

[–]Mattya929 20 points 1 day ago 

Instagram is starting to make money as it now offering ad services.

[–]from_the_country1508 47 points 1 day ago 

Ad Services = kickback from all the escorts that have saturated Instagram.

[–]SolSearcher 24 points 1 day ago 

How can I find these escorts…so I can turn them in…

[–]space_cadet8[????] 5 points 22 hours ago 

I follow about 20 normal friends on instagram and for some reason my “recommended” people to follow are all strippers, porn stars, and escorts. All you need to do is log in.

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[–]megablahblah 10 points 1 day ago 

Making revenue maybe, doubtful a profit.

[–]WhereTheCatAt 10 points 1 day ago 

Instagram’s problem is their pricing. You can run it through Facebook’s Ad Manager, but it’s so shitty when you compare the reach of Facebook to Instagram for the same money.

Facebook Ads just make a ton more sense. $10 to get 2,000+ engagements? Yes please.

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[–]an_internet_denizen 60 points 1 day ago 

Comma gore, is, a crime.

[–]hungry4pie 5 points 1 day ago 

Three commas bro ,,,

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[–]IphtashuFitz 18 points 1 day ago 

The company I work at uses it as a way to see if certain third party services (like salesforce) are having issues. Salesforce, among others, are very slow to acknowledge service related issues so when we start seeing issues with their services we check to see if people are bitching about #salesforce on twitter. More often than not we learn that there’s some sort of outage at salesforce.

Not sure if they could make money offering a “is xxx down” type of service, but it’s a thought…

[–]smokedshrimptaco 12 points 1 day ago 

That’s why I generally go there, to bitch at a company. It’s the only way to get someone to listen to you.

[–]jrocket21 7 points 22 hours ago 

That’s how I got Comcast to fix my apartment complexes Internet

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[–]baseketball 3 points 1 day ago 

Do you do any promotion through Facebook? How does it compare to Twitter?

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[–]Cocoon_Of_Dust 13 points 1 day ago 

It comes as a shock to the people who invested in Twitter without knowing what it is, I’m sure. I have no idea how else values of these companies gets so large when they don’t actually have a product.

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[–]Dillweed7 9 points 1 day ago 

Strudel. Toasted.

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[–]TRC042 472 points 1 day ago 

So investors have pumped $2 billion, over a period of 10 years, into an Internet company that’s lost every penny? Why would they do this?

More importantly, how can I get in touch with the investors, as I have this cool idea for a start-up…

[–]loljetfuel 164 points 1 day ago 

Twitter has a huge audience — nothing compared to Facebook, of course, but huge. And before the rise of competing “fast sharing” networks like snapchat, whatsapp, and the like, pretty much everyone saw them as “the next Facebook”.

So huge initial investments, designed to be “lost” — that is, spent on growing the company and its user base rather than trying to be profitable — weren’t unreasonable.

But converting that huge audience into a revenue stream hasn’t worked out. Now, there’s a lot of sunk cost fallacy (“we’ve got so much invested, maybe if we invest a bit more we’ll actually see a return!”) and “but it has so much potential!” going on. Basically, investors don’t want to have spent that much to see the company fail, so they’ll buoy it up a bit longer.

[–]BrandonIsADick 16 points 1 day ago 

But converting that huge audience into a revenue stream hasn’t worked out.

I’m surprised they didn’t start up ‘verified / secured’ accounts for publicity purposes – charge companies and celebrities for exposure. Or put a mandatory ‘advert follow’ on every non-paying Twitter account and have targeted advertising tweets in your feed for more revenue.

Or maybe they did and it didn’t work out? I dunno, I’ve so far managed to avoid Twitter. Reddit’s more or less the extent of my social media participation.

[–]aluvus 14 points 22 hours ago 

Twitter has “verified” accounts for, primarily, famous people. A number of less-famous people have observed that spending money in Twitter’s advertising system is the surest way to get your account verified (short of knowing someone that works at Twitter). But officially, there is no such requirement. This has generated a lot of bad blood, because people feel like they’re being extorted.

It’s not unreasonable for Twitter to try to limit the number of verified accounts. But they would be better off with an explicit paywall. What they are doing now is trying to exert what amounts to editorial control over who gets a verified account.

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[–]polysyllabist2 32 points 1 day ago 

It’s not entirely sunk cost though.

If I have 100 shares I spent $100 to acquire and I just give up, then I’m down -$100.

But if $10 (10% of my investment so far) can have a 50/50 shot of saving the company from going belly up, that’s a great investment!

[–]AT-ST 58 points 1 day ago 

Except that isn’t how it works in the real world, and you just kinda defined the thought process behind the sunk cost fallacy.

An additional 10% investment isn’t giving them a 50/50 shot at becoming profitable. I don’t know what kind of odds it’s giving them, but I can confidently say it isn’t 50/50.

So these guys keep dumping money in because their initial investment tied them to the fate of twitter. They don’t want to give up and take the loss so they keep dumping in money hoping for a return.

[–]Dumb_Dick_Sandwich 16 points 22 hours ago 

He was using 50/50 as an example, not as an actual estimate.

But he is correct in that it’s not a sunk cost. A sunk cost is money you’re not ever getting back and won’t give any return.

Say I build a space shuttle that costs $1bn with a return of $3bn, but it blows up on the launch pad. I’m never getting that $1bn back, but the proposition of building another $1bn shuttle for $3bn is smart business sense (assuming a loss wouldn’t ruin me in the first or second case).

Why is it smart business sense? Because after the first explosion, I’m down $1bn, but I still stand to make money if I get it right this time. Now we build a second shuttle and launch it and it works. So now, total, I’m up $1bn instead of down $1bn.

The first shuttle was a sunk cost; it’s money that I’m never getting back, but I shouldn’t let that stop me from trying again. Also, the investors can currently sell their stake in Twitter which alone means their investments aren’t sunk costs.

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[–]N3rdMan 171 points 1 day ago 

Calm down, Kanye…

[–]ThaddeusJP 5 points 22 hours ago 

But he had ideas and stuff.

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[–]doesntakethehighroad 63 points 1 day ago* 

It took 9 years and 3 quarters for Amazon to become profitable. They lost money every single year for 10 straight calendar years. Today they are the Walmart of the internet.

1st year of profit: 2003 4th quarter

Founded: July 1994.

[–]DrHoppenheimer 124 points 1 day ago 

The difference is Amazon had a clear revenue stream. It was just a question of managing cost as they grew.

[–]AT-ST 57 points 1 day ago 

Also Amazon kept losing money because they were re-inveating it into the company to grow. They knew how to be profitable, they were just trying to reach a way to be more profitable. Twitter hasn’t figured out how to be profitable yet.

[–]thetasigma1355 4 points 22 hours ago 

To be pedantic, they knew how to generate revenue. That doesn’t always mean profit. Of course, I’m guessing it was easy to look at Amazon financials and realize they were taking accounting losses as opposed to actually losing money.

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[–]Edeen 28 points 1 day ago 

Not the best example as they simply invested heavily in themselves, thus not generating any profit.

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[–]ValiantElectron 74 points 1 day ago 

They say you gotta spend money to make money. I don’t know what went wrong. We spent all our money.

[–]tef_gong 3 points 21 hours ago 

Just watched this right now!

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[–]imin2film 129 points 1 day ago 

Don’t worry Twitter… Yahoo will buy you up

[–]JonFrost 17 points 20 hours ago 

which reminds me

how the fuck are they still around?

[–]is_he_from_Gabon 13 points 19 hours ago 

Alibaba. They own massive shares in it. They where going to seperate Yahoo into “makes money/alibaba” and “webshite” a while back. No clue why they didnt.

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[–]Bioluminesce 19 points 1 day ago 

Good. It was an awesome concept at first. Then they turned it into an almost exclusively celebrity oriented media outlet.

[–]idiot_guy 3 points 9 hours ago 

It’s a great platform for breaking news/politics. The only alternative is 4chan’s /pol/ board and well… it’s very 4chan.

Reddit used to be the place for breaking news back in 2008. Now these subreddits barely move in 24 hours.

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[–]brutal2015 47 points 1 day ago 

From the same article.

Like many companies, though, Twitter prefers to talk about adjusted earnings, which exclude stock-based compensation and some other expenses. These are the figures Wall Street investors tend to focus on. By that measure, Twitter had a net income of $277 million in 2015.

[–]OriginalTodd 23 points 1 day ago 

So…it’s like pretend money?

[–]AlwaysABride 22 points 1 day ago 

Speaking as a CPA, no. Actually, its more like “real money” because it doesn’t include all the stupid accounting bullshit rules that don’t actually impact the company’s operations.

[–]pablitorun 12 points 22 hours ago 

Somehow I am not convinced you are a CPA. Dilluting stockholders to pay expenses is not something that can continue forever. It is very useful to know what their real costs are.

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[–]pulkit_anon 12 points 1 day ago 

Can’t they charge companies for commercial handles plus some additional features? Whatsapp was trying something like that.

[–]fidelitypdx 10 points 1 day ago 

They could charge business interests that use their service, but they don’t have robust enough demographic information or traffic to really make it worth the effort. Only an insignificant number of businesses have found tweeting actually drives real calculable value to their organization. Many of those are too small of businesses to afford paying for this service.

The moment Twitter tries to implement a pay-to-use system for business interests they’ll see an evacuation of the small businesses to less expensive platforms.

[–]sw0r6fish 7 points 1 day ago 

they should charge for pro accounts : 5000 + subscribers = pro account . they should charge for api usage (developers) . Twitter is a marketing tool , big users should pay.

[–]GirlEater420 11 points 1 day ago 

They should charge celebrities for their authentic accounts.

Many celebs are profiting from twitters reach.

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[–]protekt0r 52 points 1 day ago 

Not surprising seeing’s how they only started putting ads in feeds a couple years ago.

[–]1dirtypig 96 points 1 day ago 

I am firmly convinced we’re living in a digital ad bubble. Consumers are inundated with ads on every available media. I think the big reason, (other than obvious ad revenue), is that many/most online sites don’t make $ from the product they offer, i.e. news, streaming music. A company like Pandora, who’s fee paying listeners represent less than 5% of all subscribers, makes the majority of its income from ads. I don’t think that a company that uses ad “subsidies”, is a sustainable business model.

[–]RVA2DC 43 points 1 day ago 

I think the potential problem with your hypothesis is that people are too cheap to pay for anything anymore. Who wants to pay $1 a week for access to their local newspaper’s articles online? Who wants to pay $2 for an app?

Ask people to pay $10 a month for spotify? What a rip-off (I think this is their though). Meanwhile, years ago they spent $20 on a CD that maybe had 5 songs they actually liked on it.

I think we are in the era of people expecting everything for free. And when something isn’t free, they go elsewhere. I think that the ads are here to stay.

[–]1dirtypig 32 points 1 day ago 

I totally agree with you. We’ve sort of created a monster. Free music, free shipping, free news, free phone with 2 yr subscription, this list goes on and on. I remember paying for all of these things and today scoff when my online newspaper tries to get me to pay $1/mo. But I don’t think the non stop ads is the answer, and I don’t know what is.

[–]RVA2DC 4 points 21 hours ago 

Yea, I don’t know either. I would like to think that a people will pay for premium services and information, but I don’t know that it’s the case anymore. The result seems to be poorly written articles that focus on quantity over quality.

How do we convince people that they should consider the expense? I’ll easily pay $7 for a guinness at the bar, but then think twice about buying a $2 app. How has my sense of value been so messed up?

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[–]yanroy 27 points 1 day ago 

The quality of the goods also seems to have gone down, so it’s not possible to entice people back to a pay model. There’s no way I’d pay for standard cable TV even without ads because it’s overwhelmingly crap. I pay for Netflix and HBO, and I also buy individual shows on Amazon, because to me those are worth the cost.

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[–]Calypte 10 points 22 hours ago 

It’s not that I’m too cheap, it’s because I can’t afford it. I have Pandora One and Amazon Prime, those are the only two subscriptions I can afford. We have a consumer economy and the consumers are tapped out.

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[–]UPBOAT_FORTRESS_2 4 points 1 day ago 

digital ad bubble

So you think that the bubble will “pop” and all these services will abruptly terminate?

It’s insanely easy for someone to have a good idea in Silicon Valley and convert that idea into a service that generates value for someone – easier than its ever been before. If that idea will generate enough value, angel investors will flock to it like they flocked to Twitter, because maybe they’ll be able to monetize the value that it brings to people, like Facebook monetized the connections between people.

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[–]TheFrontPageIsGarbag 6 points 1 day ago 

74 years & 8 months of television advertisements dispute your novel claim.
No it doesn’t matter that nobody is buying anything they see on TV, or on the internet. As long as this artificial economy keeps moving forward, everyone will continue playing this game of pretend.

[–]1dirtypig 6 points 1 day ago 

Cable is feeling the pressure from the FCC and consumers, they know ala carte is coming, and they’re scared. I think they’re ramping up ad rev as a “last effort” before they jump ship.

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[–]protekt0r 3 points 1 day ago 

I don’t disagree that we’re inundated with ads, but why do you think it’s unsustainable?

[–]EasymodeX 23 points 1 day ago 

IMO the crux is that that value is based purely on perception — the perception of the incremental value of advertisement impact.

While reality states that advertisement and marketing is a Big Deal, I suspect that at some point decision-makers will realise that the value of blanket advertisements (and most degrees of targeted advertisements) is small after the Nth ad a viewer sees (regardless of how many the company puts out).

Regardless of whether that is true or just my useless speculation, the end result is an entire industry (and several dependent industries) reliant on the perception of value. If that perception changes for real or imagined reasons, instant collapse.

[–]I_Lived_The_StarWars 11 points 1 day ago* 

100% agree. The revenue generation models of companies like Google (90% of revenue from ads), Facebook, Twitter, etc. rely on the fact that they can convince companies that advertising on their platforms will drive incremental sales. Some of this is easy to track, particularly with click-based ads and by monitoring web traffic from certain sites; however for the ones that pay a hefty flat fee for broad-based advertising it’s basically like buying a billboard. Sure, people may see your ads but how can you prove that they are effective in driving incremental sales? Once the perception shifts and businesses begin to believe that that these types of platforms are not effective advertising vehicles any longer, the revenue growth potential for these companies plummet. It may never happen, but if/when it does it would have a major impact given a HUGE portion of the most visited websites today rely on this model.

I can’t remember the source but I read an analysis not too long ago that made the argument that companies are vastly overestimating the amount of incremental revenue generated “per-click” and that once more companies realized this it would basically spell the end of click-based advertising. I’ll see if I can find it.

[–]GirlEater420 10 points 1 day ago 

Tbh though I think Google and their search engine in particular do have value. Getting your company high on Google searches can help you destroy your competitors.

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[–]1dirtypig 6 points 1 day ago 

This reminds me of the 90’s dot com analysts that literally valued company’s based on number of clicks. That didn’t end well.

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[–]cynoclast 14 points 1 day ago 

Because people are beginning to use adblockers en masse. You’re starting to see backlash from it at last:

Internet advertisers abused us with ads for 26+ years before ad blocking became mainstream enough to force them to try something else.

Mobile sites are practically unusable because of all the ads (and app store links that somehow auto-open).

Mobile ads are the last bastion of advertisers maintaining control with all the cord cutting going on, and adblockers becoming more mainstream. We’ve come a long way from proxomitron (web proxy based ad blocker from over a decade ago).

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[–]xxflexluthorxx 6 points 1 day ago* 

I think that not only are sites that rely on ads unsustainable but I also believe that the companies that sell ads are unsustainable.

http://www.theatlantic.com/technology/archive/2014/08/advertising-is-the-internets-original-sin/376041/

[–]riverfan 10 points 1 day ago 

Even in places like Reddit, you see the admins setting up default ads thanking users for not using Adblock. Facebook is desperately trying to keep ads in front of eyeballs even as users block them.

Ads are really annoying. That is why the bubble is here. The advertisers are going to catch on that people don’t want to see them and actively avoid them. Once a protest activity like actively shopping at competitors of the advertisers starts up, the ad rates will drop.

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[–]1dirtypig 4 points 1 day ago 

Pandora, Yahoo (minus their Ali Baba stake), Twitter, a TON of apps, most new’s sites, and other crappy .com’s, A lot of these platforms that are used to broadcast the ads don’t make $. Not making money and being in business doesn’t work in the long term.

[–]PM_ME_YOUR_TATTOO 5 points 1 day ago 

Look at it this way… in the terms of existence, the internet is still fairly young.

Sure, we have a few giant kingdoms already… but all of these apps and websites are fighting currently to attempt to set up “nation states” in the new territory.

You’re going to have a lot of failure, and some successes. Those successes will prove the market sustainable most likely. And they will eventually decide who enters said market.

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[–]TheHappyGiant 7 points 1 day ago* 

I spend well over $1M/month on digital ads and with the right targeting (Facebook is the best) they are VERY cost effective methods of user acquisition. It’s the ease of use. I have 3 people handling my ad spend and we spend about $3 per action and make $4.50 per user action. The only limiting factor is the number of users we can effectively drive to the product. As long as it works people like me will continue to spend.

The problem Pandora and Twitter have is that their user segmentation (how you target) isn’t great so you need to have a product with broad appeal in order to make money.

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[–]Chessmasterrex 84 points 1 day ago 

Yeah, it’s likely a fad service.

[–]protekt0r 74 points 1 day ago 

Most social media, with the exception of Facebook, is starting to look like a fad that falls in and out of favor with teens and young adults.

[–]Chessmasterrex 68 points 1 day ago 

That’s possible, Facebook may not have staying power either.

[–]the320x200 90 points 1 day ago 

“Facebook” the company has been diversifying out from just the original social media site for quite a while.

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[–]Ennion 47 points 1 day ago 

Wait until Facebook Work launches. If you hate Salesforce.com you’ll shit when Facebook starts tracking your every move at work and create productivity reports.

[–]ridger5 11 points 1 day ago 

My company already has something like that, it’s called Hallwaze.

And it’s just a Facebook made up entirely of people in your corporation.

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[–]anillop 24 points 1 day ago 

The last thing I would ever do is use facebook for anything work related.

[–]Ennion 25 points 1 day ago 

You won’t have a choice when your company subscribes to it. Research it.

[–]anillop 51 points 1 day ago 

I sure as hell do, I have my own business.

[–]Ennion 13 points 1 day ago 

Ah well good for you!

[–]anillop 9 points 1 day ago 

It almost makes it worth the 6 day weeks, lack of vacations, pressure to make enough to pay my employees, constant travel. But they at least I don’t have to deal with facebook for contact management, so I have that going for me.

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[–]RU_Crazy 5 points 1 day ago 

What sane company would go that route rather than just putting up an intranet?

[–]Ennion 4 points 1 day ago 

[–]RU_Crazy 12 points 1 day ago 

Sure there’s some advantages. But losing control of your data is way too large of a price to pay.

[–]1SweetChuck 7 points 1 day ago 

“If somebody comes into the company, they know how to use this tool from day one,” explained Ryan Holmes, CEO of Hootsuite, which is part of the beta group. “So training cost is zero. That’s important.”

AHHAHAHAHAHA! That’s rich.

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[–]MiamiTropics 3 points 1 day ago 

Unless your employer requires it…

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[–]ngxp 23 points 1 day ago 

Except Facebook is actually profitable. Their recent earnings actually outpaced projections.

[–]protekt0r 10 points 1 day ago 

I agree. But unlike every other social media platform, they’re making billions.

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[–]ViceroyFizzlebottom 15 points 1 day ago 

Twitter might be a fad, but I really like the “brief” style and the discoverability. It’s probably my favorite of the social websites to use.

[–]protekt0r 8 points 1 day ago 

Oh I agree 100%; it’s my favorite as well. But it’s unprofitability is a problem.

I wonder how they plan to make money with Periscope.

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[–]AutismAware 13 points 1 day ago 

I really hope so, IMO twitter has become dangerous as it’s basically become some sort of platform to only promote certain ideas en mass and censors dissenting opinions.

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[–]Dhylan 28 points 1 day ago* 

Yeah, well, add to that the $2 million a week that Dorsey’s other company (Square) is losing and I’m surprised that shareholders in his two ‘companies’ haven’t put him on a spaceship going to Mars.

There is NO sanity in the way that Dorsey’s two companies have gone public, making him rich beyond anyone’s dreams, and neither of those two companies even has a hope of ever making money, much less giving the stockholders any kind of return on their shares. The guy’s a dolt, and in many countries he’d be a criminal.

What’s going on here is that the initial ‘investors’ are not really investors at all. They are insiders whose game from the beginning is to cash out with their stock options. That is what these IPOs are for – so the insiders can cash out and the public at large, the outsiders to lose their money to the insiders. This shit should be against the law.

[–]ReonL 31 points 1 day ago 

To be fair, if he’s the one walking away with all the money after investors pour in funds to non-viable companies, there’s a pretty strong argument that he’s not the dolt in that equation.

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[–]ChipmunkDJE 151 points 1 day ago 

Not that it was making money before, but Twitter has become pretty terrible since they instituted that “Trust and Safety Council”. Some may point to Anita Sarkeesian as the issue, but I feel it’s the fact that this Council exists in the first place as an issue. For a platform about free speech and communication, putting effectively a “censorship group” in charge of what is and isn’t allowed on Twitter is a terrible move. The quality has been going downhill since.

[–]Hideout_TheWicked 83 points 1 day ago 

They also appear to be selling out to corporations and political interests. Censoring the Hillary Clinton hashtag was pretty telling and i imagine will really turn off their main demographic.

[–]RenegadeBanana 30 points 1 day ago 

Holy shit this is diabolical. It’s like racketeering. Twitter:”Ms. Clinton, it would truly be a shame if some nasty tweets about you became viral…”

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[–]Worfrat1 50 points 1 day ago 

I just looked into this council, looks like it is made up of gay rights and feminist groups, among others. Not surprising they are censoring heavily now.

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[–]wayback000 10 points 21 hours ago 

Reddit is going down the same path capitulating to certain SJW hugboxes, reddit admins, and higher-ups don’t understand that the public doesn’t look kindly on this blatant favoritism.

I understand the admins viewpoint to an extent, they want to make reddit family friendly, and cute, and clean, and sleek for investors, like an apple product, but unfortunately reddit isn’t an apple product, reddit is a collection of humans talking over top of each other times a billion, you can’t package humanity to look pretty, and nice, humans aren’t pretty and nice, we are animals, and the second you tell us to be quiet is the second we give you the finger, and tell you to go fuck yourself.

the second you start showing blatant favoritism is the second we call you sellouts and we try to burn your shit to the ground.

its happening to twitter, it’s happening to reddit, people are sick of this nonsensical song and dance the admins and default mods are doing, the news/worldnews mods pushing an agenda, all the defaults have agendas, it’s getting bad, and people are seeing it.

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[–][deleted] 21 points 1 day ago 

Obviously the people running it are twits.

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[–]Cojemos 29 points 1 day ago 

Hello tech bubble. We missed you. Invite your friend housing while you’re at it.

[–]TheSlicemanCometh 11 points 1 day ago 

Housing showed up drunk, passed out early, but College loans crashed the place and is on zers 8th pbr and just started twerking.

[–]josefstolen 54 points 1 day ago 

Someone should “mansplain” finance to them.

[–]needconfirmation 20 points 23 hours ago 

Profit is just a construct of the patriarchy made to keep…somebody down.

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[–]Darenflagart 53 points 1 day ago 

That’s ok. They’ll just selectively censor legitimate use of the service until they recover.

Jack Dorsey cares about equality and safe spaces and shit, and that’s why he’s a billionaire who works silicon valley like a street magician.

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