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Twitter Needs To Shut That IPO Down Right Now

By / 09.13.13

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Twitter is having an IPO! Finance types are rejoicing, start-ups are hoping this means the heady days of 2000 are back again, and everyone is generally wondering what happens next. The short answer? Nothing good.

If you want to see what the general trajectory of Twitter will be, honestly all it takes is to look at the last big social media IPO: Facebook. Sure, you can argue that there’s no Zuckerberg running things, which is true, and that Twitter will not be dealing with the relentless cycle of privacy scandals and problems, which is also true.

But, in our coverage of Facebook, there’s a very distinct trajectory: Ads, and lots of them. Ads in your Instagram. Fifteen second video ads. Facebook ads creeping from the right hand side of the page into your feed. They’ve even stopped pretending it’s targeted advertising. Facebook is desperately trying to become Google without turning into AOL, and it’s because the wolf is sitting at the door.

The problem is essentially this: For a business, especially a tech business, to grow and thrive, they have to be focused squarely on the future. Wall Street, on the other hand, wants quarterly results. It’s not good enough to just make more money than you spend: You have to keep making more money and spend less, and you have to prove you’re doing it four times a year.

Twitter is arguably worse off than Facebook in this regard; at least Facebook has a lot of opportunities for ads. What’s Twitter going to sell as advertising? Promoted Tweets? If anybody can get a free account, why pay Twitter?

Worse, a lot of the people investing in companies like Facebook are, not to put too fine a point on it, terrifyingly technologically illiterate. Mark Zuckerberg, in a shareholder meeting, had to explain what a hacker was and how Facebook worked. He had to explain his own product to the people who get to decide what it’s worth. And worse, they didn’t understand him. This is a terrible position for a company to be in.

It’s true that Twitter can’t live on investor rounds and Jack Dorsey’s Square money for the rest of time, but the IPO is, in the long run, a mistake. So, Twitter, for your own sake, shut it down. Or maybe just sell yourself to Apple.


TOPICS#Twitter
TAGSBAD IDEASIPOrun in the opposite directionSocial Media

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