Friday, September 18, 2009
First individuals, then companies got into the habit of Twittering to share the latest and greatest news about themselves and their opinions. It has enabled a customer dialogue, although personally I have found little use or interest in it. But it has become a great marketing tool, pushing revenues and profits north, except for one, Twitter itself. "Lack of earnings isn't stopping Twitter's founders from shooting for the stars. Earlier this year, it was widely reported that Facebook offered to acquire Twitter for $500 million of in stock and cash, but the co-founders said they turned down the offer, holding out for more."
So the thinking must be that there is more dollars out there than in the buyout offer. And getting Facebook to make an offer means that Facebook would rather join them than beat them. So how will Twitter turn itself into a moneymaking machine. The obvious is to use either an advertising or subscription route or both. But will Twitter's "fans" accept ads with their tweets or will they turn away. Twittering on the computer leaves room on the screen for ads that can easily be overlooked; but Twittering on a mobile device may be more problematic.
And can a free service be turned into a subscription service (Variety thinks they can do that) and grow that way. Twitter faces some huge challenges to right itself while others have successfully deployed it to serve their other profitable businesses. Perhaps too, the Facebook offer was simply not high enough. "Numerous rumors of acquisitions by giants such as Apple and Amazon rise and disappear like the tides." We will have to wait and see but my vote is that Twitter needs to take the money and run.
Posted by Andy Hunn