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Can Twitter Survive By Becoming A User-Owned Co-Op? (salon.com)
What's going to happen now that Twitter's stock price has dropped from $66 a share to just $18? An anonymous reader quotes Salon:
A small group of shrewd Twitter users and shareholders have come up with proposals to fundamentally restructure the way Twitter is controlled, to turn the company into a public service by removing the need to feed investors' ceaseless appetite for hitting quarterly growth benchmarks... Sonja Trauss, a Bay Area housing policy activist, and Twitter shareholder Alex Chiang proposed earlier this year a resolution for the company's recent annual shareholder vote to promote ways to get Twitter users to buy stock in the company, such as offering ways to buy shares directly through the Twitter website and mobile app. If many individual Twitter users each owned a small piece of the company, then they could participate collectively (through the annual shareholder voting process) in steering the direction of the company.
The idea makes sense from a labor standpoint. Twitter's value comes from user's tweets, which provides the backbone for digital advertising revenue. Twitter also sells this user-generated data to third parties that use it mainly for market research. This bloc of user-shareholders could theoretically overtake the control major institutional shareholders...have over the company. Because a lot of owners of a few shares of the company would have little to lose if the stock price doesn't grow or wavers, Twitter would be less beholden to meeting Wall Street's often brutal expectations.
The idea makes sense from a labor standpoint. Twitter's value comes from user's tweets, which provides the backbone for digital advertising revenue. Twitter also sells this user-generated data to third parties that use it mainly for market research. This bloc of user-shareholders could theoretically overtake the control major institutional shareholders...have over the company. Because a lot of owners of a few shares of the company would have little to lose if the stock price doesn't grow or wavers, Twitter would be less beholden to meeting Wall Street's often brutal expectations.
after all they spend most of the time telling me what some fuckwit on twitter thinks about something. or a celebrity fuckwit thinks about something else.
easier than doing some research and writing some content, eh?
The most serious problem with Twitter is not who gets involved or who it highlights. It is Twitter's core approach to conversation. 140 characters do not provide enough room to make a real argument or explain anything in detail. Instead, posts devolve into cheap point-scoring and the use of slogans that signal one's tribal affiliation. This pushes people out of the "middle" and towards some outlier perspective -- maybe "pro" or "con" on the original question, or maybe "con" on the Internet or humanity in general.
Given their "$18.31" stock price. Call when they drop below $0.02 per share.
They are a for-profit business no chance in heck of going to any kind of co-op, sorry. Investors won't be on-board for that.
Yeah, I'm not sure how this is supposed to work with a publicly traded company. Like, ok, users buy a bunch of shares, and then what? If it looks like it's driving up the price, it's just going to encourage a bunch of speculators to buy in. The fad passes and the buying-spree ends, and the price drops again. Any of the users who bought in still don't have control, and meanwhile have probably lost money. And even that's only if a substantial number of users buy into it.
It only seems like a good deal for existing shareholders hoping to drive the price up a bit before they sell. Am I wrong? Am I missing something?
To make any money, they need a much more compelling product. At the moment, a measurable number of people get "all" the followers. 99% of people only get their friends as followers, and maybe not even that many. As such, for most people, the only way to get any attention is to be a troll or whatever - low value tweets designed to inflame or defame. Since your account has 5 followers, you can easily ditch it (or let it get banned) and start a new one.
On the other hand, celebrities and famous/interesting people value their accounts highly. They've only got it all to lose though - they're not trolling or inflaming arguments, they're just posting their own brand of whatever it is they post. They just get loads of abuse from the low-value accounts.
Thus, by accidental design, Twitter has an inherent imbalance - the people you want to retain are the biggest targets of the kind of activity you want to suppress. Suppressing bad activities is as good as impossible because the people doing it think nothing of just rotating accounts.
Possibly the only was for Twitter to 'survive' is to create a reputation system similar to /. karma. However, followers and retweets are about as unreliable a measure of 'reputation' as they come, so they'd need some other tools to get reputation information, and they'd need to make it low-value-rotated-accounts proof too. Not easy to do, but I don't imagine impossible either.
As for the 'co-op' - it's gonna have to be a penny stock before any investors will go for that idea. By that time though, it'll probably be a dead platform - although we'll see, it may fail in the market faster than its users can be convinced to go elsewhere. Certainly, governments are queuing up to find ways to give them higher costs of doing business.
Spending huge on RnD is a Wall Street requirement for tech companies. If you are not spending huge on RnD your multiplier is slashed and your stock craters. The assumption (which is almost always wrong) is that the RnD will lead to another product from the same geniuses that brought them the current product. In the early 1990's BMC was not getting the respect they thought they deserved from Wall Street and they figured out that all they had to do was spend money to get their stock price to triple. So they did. They set up an entire new office in Austin that pretty much just spent money and they called it RnD and their stock price went up. If Twitter slashes their RnD now, Wall Street will kick them to the curb. Twitter may be over-doing their RnD spending, but the amount they spend is likely driven by communications that they have had with institutional investors.
We've had this discussion before. There is just no need for Twitter to have more than 50 employees, in which case they would be rolling in money. Nearly 4000 employees, scattered over I-don't-know-how-many international offices? Stupid.
It was probably growth in an attempt to pump the stock price. Without the unrealistic VC expectations, Twitter wouldn't have a valuation anywhere over $100 million, and probably not that. But then - given what Twitter actually is - it really shouldn't be valued that high anyway.
A valuation of $50 million for a 50 person company would already be very good. They would have a stable business, and be quite the money spinner. But that's not good enough. The MBA and marketing idiots only have one word in their vocabulary: "growth". A business without growth is something they seem utterly incapable of comprehending.
Enjoy life! This is not a dress rehearsal.