We learned recently that after years of rebuffing overtures from some of the world’s most successful companies (Facebook, Google, Microsoft, Apple), Twitter is considering a sale, finally succumbing to the pressure to turn a profit. A few years ago I lectured at a university symposium, and I said something to the effect of “Watch Facebook and Twitter – neither of them are making money right now, but they will. Once they adopt some sort of advertising model, they will look drastically different, but they will be profitable.” As proof that I am at least 50% clairvoyant, Mark Zuckerberg clearly heeded my advice and took Facebook public, adopting a business model that doesn’t stop at trading big data, but also pushes so many variations of the “sponsored post” into our news feeds that sometimes it can be hard to find aunt Betty’s daily post decrying the lack of cursive writing in public schools.
Twitter, on the other hand, chugged the “new model of American business” Kool-Aid and kept plugging away with only the faintest hint of a plan. They gave their service away and begrudgingly introduced “promoted tweets” like a teenager being asked to clean their room. To this day, you can tell that Twitter’s heart isn’t really in making money. They turn their noses up at Zuckerberg even as they circle the drain in his solid gold guest house.
Ironically, Facebook succeeded because they told the world they had a new idea (we’ll give our service away for free forever, all we need is your information), then once we were all hooked they simply adopted the exact same business model that American media has been using since commercially supported radio went on the air more than a century ago. Did we all cancel Facebook? Nope. We see some ads (maybe too many – pump the brakes, there, Mark – how many gray t-shirts do you need?), we click on one occasionally, we ignore the boring ones, Facebook’s stock grows steadily and everyone is happy.
Twitter’s leadership didn’t get the memo. When Facebook surprised absolutely nobody and suddenly became a traditional media company, Twitter stubbornly clung to the original plan like a sixth grade boy whose best friend suddenly starts dating. “You can’t do that! We made a pact!” Even their sad parade of “big idea” CEOs couldn’t figure out how to make a business model work that decried both advertising and subscription fees. Somewhere along the way Twitter had their own IPO, and now all of those investors are looking at the world’s most wobbly stock price and demanding to see the monorail in action (true Simpsons fans will get that one).
Who’s going to step up and turn Twitter around? The usual tech suspects don’t seem to be overly interested, and more traditional companies might be looking at the Verizon-Yahoo fiasco and thinking twice. Interesting, Disney was rumored to be one of the suitors kicking Twitter’s tires last week. Imagine that, a traditional media company (television, movies, etc.) introducing its tried-and-true methods to the social media world. Whoever ponies up the billions to buy Twitter, you can bet that it won’t be business as usual.
By the way, I use Twitter daily, and I love it. That’s why I want them to find a realistic business model that actually works – because I don’t want to lose them. I am very interested in seeing how this all plays out over the next few weeks or months. It’s not about old school versus new school, it’s about good business versus bad business.