Why can’t Twitter make money?
The recent news about Twitter is anything but reassuring for those of us who see value in the bluebird’s social network: myriad conversations aimed at selling the company, in which all potential buyers end up backing out. Apparently, no one wants to make Twitter an offer.
The problem is that Twitter needs a buyer. After many years of political infighting and attempts to redefine it by finding new money-making activities, most of the people I know who use Twitter still think it gives them great value and that if didn’t exist, somebody would have to invent it … but the company has serious problems in making enough money to keep its share price afloat.
The problem, of course, is the very essence of its activity: a social network focused on immediacy that has become a global information system that lets us know what is happening anywhere in the world at any time and that defines our interests with the precision of a surgeon depending on the portfolio of people, media and companies that we have decided to follow is a great idea.
Twitter is perfect for those who need to stay informed about a specific topic, it is ideal for following the news in general, is great for keeping up with what is going on with any subject and provides reliable data on what governments, organizations and anybody else is saying in response to what others are saying about them… but even if all is important to a lot of people, it’s extremely difficult to find a way to make it profitable. And although the company has managed to generate great advertising formats that are not annoying, enabling advertisers to reach their target audience, it appears that neither the numbers nor the growth forecasts satisfy the market or its shareholders.
What we do with Twitter then? Over the years, I have seen how my students have changed from seeing Twitter as a way to keep in touch with friends and news from their home, to seeing it as a way to create an image or personal brand, as a way to follow their idols or the characters of the industries that interest them, and most recently to put their accounts on the back burner or to use them only in lurking mode.
My impression is that as long as Twitter is unable to explain to its users its different value propositions and to turn its network into a reasonably safe place where certain behaviors are not tolerated, it will continue its engagement figures fall and the number of inactive accounts increase. And perhaps this is as it should be: not all those who have the ability to open a Twitter account have the necessary common sense or enough to say to feed their account. Many people use Twitter passively, just to follow people who interest them or who they want to feel closer to, and have no special interest in sharing anything or actively participating in the conversation.
Which is all fine and well, but the problem remains as to how to convert Twitter into an economically viable entity. That’s what successive management teams of Twitter, over the years, have not apparently been able to do. Can a new owner create the right synergies and find the holy grail to make it a money spinner? Or should we just accept that there is no way to monetize an activity even though to the faithful it seems irreplaceable? If solutions are not forthcoming from within and nobody on the outside comes forward, at least not with the required conditions, then what does the future hold for Twitter, a service that many of us really love to use? Become a nonprofit?
(En español, aquí)
