I saw a bunch of online guffawing yesterday (mostly on Twitter) about Twitter's new "strategy statement":
Twitter’s shares began jumping as CFO Anthony Noto, who spoke early after Costolo’s introductory remarks, firmly emphasized the company’s strategy and touted its strengths. He mentioned three objectives: to strengthen the core audience of users; to reduce barriers to consuming Twitter content across the entire audience; and to deliver new services and apps to entice new users.
“They’re doing all the necessary things, or at least talking about all the necessary things about product and marketing,” said RBC Capital Markets analyst Mark Mahaney, who attended the presentation. “But at the end of the day, when it comes to the stock, all of this needs to translate into reaccelerating user growth and growing engagement per user.”
Noto, who led and emceed most of the all-day event, also read out Twitter’s new strategy statement, which he admitted was a mouthful: “Reach the largest daily audience in the world by connecting everyone to their world via our information sharing and distribution platform products and be one of the top revenue generating Internet companies in the world.”
“I struggle to read it every time,” Noto said.
Twitter is (along with my RSS reader) my primary source for news, current events, commentary, and interesting stuff online these days. I love the service and find it highly valuable on many levels.
However, Twitter has a serious problem. They are a public company, and their growth of new users is slowing. That is totally understandable, given that its value to a brand new user is, to put it politely, not entirely clear. I get a lot out of Twitter, but I have spent six years cultivating an interesting and diverse mix of people to follow, and I don’t get freaked out if I don’t look at my stream for a while and miss a bunch of stuff.
New users get… some celebrities, CNN Breaking News, and a bunch of trending crap. It’s no wonder most people’s reaction to the service on their initial encounter is to wonder “Why the hell do I want to listen to a bunch of people blathering about what they ate from breakfast?” So now you get Twitter flailing around, trying to figure out any way possible to get their numbers of new users back up, because that’s what the investors want. In so doing, they will likely start screwing up the bits that make the service valuable to me.
I don’t feel particularly indignant about it, given that I pay them no money for using their product. Still, I can be sad about it. And really, the overall model here is pretty depressing. Twitter needs money from investors, but the investors view it as nothing more than a machine with a crank. Turn the crank, and money comes out. As long as the money keeps coming out, the investors stay happy, even if turning the crank means you’re grinding all the inner workings of the machine to bits. When it finally falls apart, or if the money stops coming out, the investors will just go find the next box with the next crank.
I suppose it’s a fine model for cranking out money, but it seems like a pretty shitty model for actually getting nice stuff.