Suddenly there’s a lot of noise about Twitter hitting an execution wall. The musical chairs at the top with Dick coming, Ev backing away, Jack returning, and Ev really leaving are responsible for much of the discussion. Underlying the shifts is the current meme that Twitter now has to justify its valuation with some clear business model. The only problem with all this: so what if Twitter has no clear revenue to justify the $3 or 4 billion the company is supposedly now worth.
Part of the problem is the comparison to Facebook, which is said to be enjoying over a billion in revenue as compared to 2 digit millions for the Twitter cloud. One is leveraging a carefully curated cloud of friends and family; the other is a realtime news service on the front lines of the media transformation. As such, Twitter is more analogous to Netflix than it is to Facebook.
If Twitter counted users as subscribers, they are 10 times the 20 million of the streaming service. But of those engaged enough to be analogous to paying subscribers, the numbers are likely more equal. All that’s left is to identify what those frequent flyers do and how that might represent addressable engagement. Engagement, by the way, means show me the money. And Twitter doesn’t have to explain how to make money in order to justify the value of the service.
What it does have to do is clarify what it does and why that IP is uniquely and defensibly held by its executives and investors. It makes sense (at a surface level) to identify presumed success by examining the talents and track record of its executives. Keep in mind that Ev Williams sold his previous company to Google and is known to have been unhappy with what followed. As with a list of acquired CEOs including most recently Dodgeball’s Dennis Crowley and Jaiku’s Jyri Engestrom, Google’s track record has been spotty. No more so than what happened with Yahoo and another string of acquisitions, but not the success Twitter is threatening.
Twitter’s IP is that it controls the worldwide realtime news information bus. Although the news business and other entertainment networks have been challenged by the move to the Web, and now the tablet, the social media that emerges will have huge economies of scale and formidable barriers to others’ entry. Take a look at what Apple has done with its iPad lead, and how it appears ready to add cloud services. Who are the competitors in the social news space?
Facebook? No real iPad app, though the iPhone one plays in the push notification alert business. The realtime nature is blunted by the lack of speed required to gain traction (your friends are still going to be there 5 minutes later) and the way Likes are implemented as a vote rather than a cascading viral retweet. No @mentions either, which not only provide a head’s up to the mentioned but a social map to the group (implicit or explicit.)
Google? So focused on killing Facebook by cloning that there’s not even 20% time left over for Twitter. Microsoft? Oracle? Who? None of them care about news, or heterogeneous direct messages that span silos. But we care. Twitter DMs are simple, push notification compliant, and built on a namespace we’ve decorated with streams that define our interests, opinions, values, and relationships. Who else has this? Nobody.
Meanwhile, the garbage about Twitter continues, to what end. Are competitors trying to eat away at the inevitability of a user-managed system of record? What competitors? Chatter? The only similarity there is how far ahead Chatter is in the enterprise, with its combination of viral incentive for creating and routing the status updates of the enterprise software and device grid, and a revenue cloud that ensures continued growth. I don’t mind ringing our own bell, because to not do so is misleading.
Mostly, the noise is a reflection of the lazy media. Faced with the choice of reporting what is a secret even to the direct participants or making it up out of whole cloth, reporters hide behind a lack of conjecture while pundits try to thread a needle of conservative guesses that are more likely to be vaguely true than not. The latter produces tons of predictions about decisions not being debated; the former reflects the conflicting recollections of eyewitnesses to the most forgettable of events.
Here’s my guess: the combination of Dick Costolo and Jack Dorsey together with the benign pressure not to sell of Evan Williams adds up to massive success when the iPad platform reaches its first stage of maturity. By maturity I mean an application ecosystem that thrives on the routing of addressable metadata-wrapped objects based on @mention-weighted push notifications. We are at an early stage where users are learning how to process poorly-hinted incoming pointers into the information stream, and in the process providing signatures of behavior that will inform the filtering substructure when they are broadcast in parallel to the objects they decorate.
The good news is that these iterations are software-based not hardware-constrained. The relative stability of iPad 2 over, or next to, iPad 1, suggests the new computing platform is close to lift off. The signature of laptop-based information triage is multiple open windows or tabs, email and social alerts, and digest hints of the value of serial video streams. It’s an effective interface, one that we can’t yet replace with the tablet/notification paradigm. Or can we?
The iPad presents a new set of primitives that taken together orchestrate an uber queue of social imperative. Namely, a dynamic list that emulates at a tunable process layer the kind of mental triage we perform routinely: is this actionable, is there an advantage to being timely, what value will this provide to someone monitoring my feed, the group’s feed, related feeds, and so on. More: is this valuable regardless of the spread of the content, can it make access to the content more valuable as a result, does this value provide incentive not just for subscription but for creation of the original content and tuning of the contributors?
On this week’s Gillmor Gang, Foursquare boss Dennis Crowley bats away similar noise about The Death of Check Ins. He concludes the show with a pitch to the shrinking pool of developers, saying that contrary to fading, the company is focused on capitalizing on the opportunity in front of it. I never check in to Foursquare, preferring to lurk at the push notification level where the rhythm of check ins blends with @mentions and news alerts. But what Crowley and friends are building out is a fascinating version of that uber queue within Foursquare. In one view, you can surf nearby specials as vendors compete for attention with discounts. In another, you can explore different categories of venues in a given area. Two slices, two dices — new incentives for metadata creation that grow exponentially as they take off in popularity.
As Mark Twain, or Yogi Berra, famously said, reports of Twitter’s or Foursquare’s death are exaggerated. There’s way too much left from picking over RSS’s carcass. No, seriously, I really mean that. There’s way too much value lurking in Jack Dorsey’s original pivot from a bike messenger dispatch service to be mined, and who better than Dorsey to lead the charge as the iPad drives the push notification queue into the new media vortex. It’s two minutes past the Big Bang, and not enough time to grab the low hanging fruit. As Professor Irwin Corey, or Wavy Gravy, said Adam said to Eve: Stand back, I don’t know how big this is going to get.