Twitter Bitter

Twitter rubs me the wrong way for different reasons. Let me explain.

I can't deny the social web is an outlet now for commercialization, much like TV has been. The parallels are simple. You pay for TV and you pay for the internet. Both are channels of distribution for content. Networks produce television content and then recoup their revenue in the form of advertisements. Most websites aim to do the same thing. Obviously these similarities have been over simplified, but the modal has worked for sites like Digg, Facebook, and Google.

Twitter retains and displays 140 characters of text and allows users to follow one another. The hype machine has exploded around them in 2008 and the momentum is continuing to build in 2009. Politicians, athletes, celebrities, and students thrown in jail in Egypt all use Twitter now. Twitter has gone above and beyond what I thought it was capable of.

Now we are in a recession. We look at bankers and brokers and shake our collective heads. Irresponsible lending got us into our current situation. So it astounds me when a site like Twitter can raise millions in capital not once, but twice. As of today Twitter has made $0 in three years of service. I have no idea how many millions they have spent in that time for very legitimate expenses like bandwidth, hardware, R&D and so on. The investors must know something the public doesn't...or not.

Websites like Salesforce and Basecamp can actually sell a service, usually geared to corporations who will spend money. Facebook, MySpace, and Digg have managed something miraculous. They sell us (to advertisers) because frankly they can't charge us (everyone would just move onto the next free service even if it were rubbish). We are more valuable as a whole than to try and nickle and dime us. This makes the social web a viable and honest business. In a recession there are only so many advertising dollars to go around.

Twitter has admitted publicly it has no idea how they are going to generate revenue and doesn't seem to care as they are continuing forward with R&D (Maybe on a 280 character feature). If that was my capital or 401k/pension that was being invested I would be pretty furious. Twitter has become the Worldcomm of the web 2.0 era because even they don't understand what it is they are trying to sell. Then again maybe they do. How else do you convince someone to hand over millions of dollars to you? Digg and Facebook managed to make it work. Now Twitter does.