First, the article is dumb, twitter is already a giant. Twitter is bigger in social media than facebook because it is open to the public, while facebook is a gated community.
Second, "the problem with twitter" as commentors have been saying, is that Twitter is a glorified instant messenger, and they have done everything wrong.
They're a giant corporation with too many employees. They have a huge overhead cost for servers and offices and electricity and so on. And their only product is social media, for free.
This is the era of ad-filtering. Substaining a company on advertising is a dead model, it will never work again. It's dying slower in some areas than in others, but rest assured it is dead. Furthermore, nobody using twitter wants to see ads. Users will aggressively persue means to eliminate ads from the "social" experience.
Twitter is the digital equivalent of opening a number of sports arenas and inviting everyone to come in to mingle, without ever charging admission fees. Eventually, the power bill and lease is going to shut them down.
This is a reality check. You cannot make money by giving things away for free. You can make money from free products, but you have to do things to monetize it, for example selling expert support for free software.
Commentors keep comparing Twitter to Facebook. Twitter and Facebook are exactly the same in one way, neither one makes any money from social media. Facebook is profitable because Facebook is not a social media product, it is a portal product that offers social media. Facebook makes money from selling "microtransaction" games, which are a huge ripoff, and using their enormous size to convince business owners that investing in advertising is somehow worthwhile. Again, nobody wants to see ads during their "social" time.
Social Media is not a business. Social media is a chat room with a slightly re-defined UX. You cannot make a profit from social media without charging admission. It is impossible.
In the post-advertising era the only way businesses will be successful is if they produce products or services of actual real-world value to their customers. Parasitic businesses, middle-men, advertisers, they are all going to die. And good riddance. Money should be earned by the creation of value, and nothing else.
"Substaining a company on advertising is a dead model"
A Deloitte report explained FB has created $40bn of economic value across the world. Let me explain to you how:
- People are selling shit on social all day everyday
- Every organisation markets themselves using social
- social media is where most attention on mobile is
- All social media platforms make ads
- Ads are charged on CPM (Cost per 1000)
- Trillions of impressions are served, therefore billions of ad dollars flow to the platform, billions with a b
- All these businesses have 100s of millions if not billions in cash on their balance sheets
For the record these ad products have kept 1000s of people in advertising jobs around the world and helped around 3 million advertisers spending billions collectively sell shit online.
Computers and the internet are relatively new, compared to advertising. The ad-blocking era is only about 5 years old.
Give it time, you will see that I am right.
Again, facebook is not a social product. Facebook is a portal product with a social feature. They're not competing with Twitter, they're competing with Google and Microsoft. It is apples and oranges.
Second, "the problem with twitter" as commentors have been saying, is that Twitter is a glorified instant messenger, and they have done everything wrong.
They're a giant corporation with too many employees. They have a huge overhead cost for servers and offices and electricity and so on. And their only product is social media, for free.
This is the era of ad-filtering. Substaining a company on advertising is a dead model, it will never work again. It's dying slower in some areas than in others, but rest assured it is dead. Furthermore, nobody using twitter wants to see ads. Users will aggressively persue means to eliminate ads from the "social" experience.
Twitter is the digital equivalent of opening a number of sports arenas and inviting everyone to come in to mingle, without ever charging admission fees. Eventually, the power bill and lease is going to shut them down.
This is a reality check. You cannot make money by giving things away for free. You can make money from free products, but you have to do things to monetize it, for example selling expert support for free software.
Commentors keep comparing Twitter to Facebook. Twitter and Facebook are exactly the same in one way, neither one makes any money from social media. Facebook is profitable because Facebook is not a social media product, it is a portal product that offers social media. Facebook makes money from selling "microtransaction" games, which are a huge ripoff, and using their enormous size to convince business owners that investing in advertising is somehow worthwhile. Again, nobody wants to see ads during their "social" time.
Social Media is not a business. Social media is a chat room with a slightly re-defined UX. You cannot make a profit from social media without charging admission. It is impossible.
In the post-advertising era the only way businesses will be successful is if they produce products or services of actual real-world value to their customers. Parasitic businesses, middle-men, advertisers, they are all going to die. And good riddance. Money should be earned by the creation of value, and nothing else.