Are you old enough to remember Netscape, the company that created the world’s first commercial web browser and server?
Netscape started life as Mosaic Communications Corporation. (In fact, their 1994 web site is still online and worth a look!) The company changed its name to avoid conflict with the older NCSA Mosaic browser. In August 1995 Netscape was listed on the NASDAQ stock exchange, saw its stock shoot up nearly threefold in the first hours of trading, and ended the day with a market cap of over $2 billion — unheard of (at the time) for a company with no profits. Netscape was the original blockbuster Internet company before Amazon, Google or Facebook.
The fall of Netscape was almost as meteoric as its rise. Microsoft started pouring money into browser development and bundled Internet Explorer for free with Windows, thus killing the market for a commercial browser. The server product also faced heavy competition, especially from the free Apache server project. Having lost its revenue streams, Netscape first made its browser open-source in an attempt to counter Microsoft’s R&D juggernaut, then finally in late 1998 ended up being bought by AOL in a stock deal that was worth $10 billion when the deal was consummated. Netscape stockholders were presumably pleased, although nobody else really was in the end.
The open-sourced Mozilla browser continued life under AOL/Netscape’s auspices. When AOL lost interest in the Netscape/Mozilla browser some years later, the project was spun off into the non-profit Mozilla Foundation. That coincided with a turn in fortunes for the browser as Microsoft’s Internet Explorer development stagnated for years, opening a window for Mozilla’s browser (in a lean edition newly christened Firefox).
Today, the Mozilla Foundation is a core player on the open web. As a non-profit, it provides an important balance against the interests of the three giant corporations — Google, Apple and Microsoft — that own the other remaining web browser engines. Mozilla also develops many other projects, some unsuccessful and frankly lacking purpose (Firefox OS), some offering important solutions to hard technical problems (the Rust programming language). The web without Mozilla would be much poorer today.
What does all this have to do with Twitter? The social media company today looks much like Netscape did in 1998. Twitter was one of the original social media pioneers, but it hasn’t reached the same level of global growth as Facebook. Twitter’s core product has stagnated while the company’s R&D seems to fritter away into entirely separate apps like Vine and Periscope. (At Netscape, executives wanted the company to make a “groupware suite”, not just a browser. Twitter’s lack of focus seems to be in a similar vein.)
Like the browser, Twitter actually provides an important infrastructure service on the modern Internet. It’s just not clear whether that alone has the makings of a growth-oriented public company. In the case of Netscape, the answer ended up being “no”. With Twitter, the answer is also increasingly looking like “no”.
Latest news (as of 14 October 2016) suggest that Twitter is not going to be acquired: Salesforce was openly interested but has apparently given up on any deal, and other rumored suitors disclaimed their interest weeks ago.
Where does that leave Twitter? The company will of course continue to exist, but it’s hard to imagine its stock price recovering soon. Twitter Inc.’s revenue is growing, but it has been constantly losing about half a billion dollars a year. New management will have to make deep cuts to bring the company to profitability. That kind of profit-oriented downsizing can easily become a vicious cycle that will end up destroying what’s good about Twitter-the-product today.
Twitter would deserve a more positive path forward, and Mozilla’s example provides one example to follow. Spin off the core of the platform into a non-profit, a “Tweetzilla Foundation”. Let the unleashed tweet streams become an essential piece of communications infrastructure on the web. Open up the APIs which Twitter-the-company closed years ago while trying to force users away from third-party clients (this was done so that ads could be served more easily, but it created lasting bad will towards Twitter in the developer communities).
Meanwhile the for-profit company — let’s call it “Twitter Media Inc.” — should focus on building the best damn consumer experiences on top of the tweeting platform. Double down on live streaming and other media experiences that benefit from Twitter’s real-time feedback. Make the ad platform so compelling that third-party Twitter clients will want a share of the action. This is what Google does with its AdSense program: it serves ads on millions of websites, yet it doesn’t need to control the web itself.
Yes, Twitter Media would be a smaller company than present-day Twitter, and getting Tweetzilla Foundation off the ground would be difficult (current Twitter’s cost of operations is probably tremendous). But it’s a more positive vision for the future than seeing Twitter Inc. shrink into a sad kind of operation that tries to wring increasing profits from the hardcore users of a closed social network.
The board of the current publicly listed Twitter Inc. might not approve of any non-profit spin-off — but what if Twitter went private? As its stock price sinks, the price tag becomes more palatable. Steve Ballmer has a well-documented interest in Twitter and owns about 5% of the company. A dedicated visionary with very deep pockets like Ballmer’s could conceivably make an offer for Twitter’s entire stock, take the company private, and then create the Foundation.
As a business endeavor this would not be immediately profitable. But for someone looking to make his mark on the Internet’s history, it might have a unique appeal. (He could simply call it the “Ballmer Foundation”, just to make it more obvious.) And the private Twitter Media could still become a highly profitable company eventually.
It’s a pretty crazy scenario. I’m using Ballmer here as an extreme example of how even a private investor could potentially turn Twitter into something much more important than it currently is.
Any such path needs to start with a vision, though. If you like Twitter, why not share yours in the comments?