The news this week that Twitter will be inserting Ad tweets into the time line that you view on your iPhone will not come as a surprise to most people. The punch line is called well in this Gigaom article by Mathew Ingram:
For Twitter, it’s about justifying the $8-billion market value it currently has as a result of raising funds from a host of venture investors such as Russia’s Yuri Milner.
It suddenly feels like the exciting adolescent companies Google, Facebook and Twitter, those bohemian prospects that had so much potential - companies that were helping break the mould of IBM and Microsoft, rejecting corporate drudgery and it’s inevitable side effects. These companies have grown up and started paying their mortgage like the rest of us.
At SxSW four years ago, using Twitter to communicate with fellow travellers felt cool, edgy and distinctly alternative. Now that same service will be serving up McDonald’s Ad tweets each day to the phones of 300 million users.
Of course this was inevitable, as the behaviours of ‘do the cool thing today, build the user base & pay tomorrow’ move to ‘Time to pay’. It is an analogue of the life stages of all of us.
It’s likely that the VC invested in Twitter will want to materialise a return through an IPO in 2013. It will probably IPO at a $10bn valuation and that in turn will require a bottom line of $1 bn with a 10%+ annual growth trajectory. This is all do-able but over time Twitter will feel more like watching prime-time commercial television and less like a personal, cutting edge communication tool.
The need to deliver this relentless growth to markets is probably the single greatest threat to the longevity of the popularity of Google, Facebook and Twitter as customers always ultimately dislike the things you have to do to keep growing the money machine.
But imagine if about 36 months ago, before Twitter’s valuation broke the $1 bn level, Dorsey had gone a different way and structured Twitter into a not for profit partnership or co-operative. Once you have your own $100m and your initial backers have been repaid 20 times money, legacy becomes more important to most people than the next $1,000m.
It could have been different.
I’d contend that the very best way to have secured Twitter’s enduring legacy would have been to free it from the shackles of those market economics. Once Twitter had critical mass, if all it had to do was pay for it’s operating costs and NPD, It could have grown the short messaging service, free from Ads (enough income could have generated by selling the data hose to corporates), and grown into the adjacent areas of being an invincible provider of social, email and search. Invincible because compared to Google, Facebook and others, it could have been the only one owned by it’s users, not needing to pollute it’s operations with Ads or privacy concerns, able to shape itself only worried about the needs of customers not by ‘where is the next $500m going to come from?’
It could have become the very internet itself.
It’s too late for Twitter but maybe food for though for next ‘Facebook’ where ever that might be in it’s evolution right now.