Twitter has had its enthusiasts and its naysayers, its dismissals and its moments in the sun. All young things must grow up eventually, though, and tech bloggers are now discussing the hard choices ahead as the microblogging service moves into its sink-or-swim adolescence. Here are some of the problems they forsee:
- To Make Money or Not? "It sounds ridiculous," admitted Michael Arrington of TechCrunch, "but it is a real decision." He explained the conundrum: "once revenue is on, how the company is valued by the market can change dramatically ... When you don't have revenue, you can't be valued based on a multiple of revenues."
- Potential Pitfalls "Twitter could," wrote Erik Sherman over at the BNET Technology Blog, continuing a longstanding discussion of Twitter's revenue-making ability, "find itself with the worst of both worlds: revenue that doesn't look like it will keep the company running at the rate it needs and yet not large enough to entice further investment."
- Paychecks? Revenue, argued Jason Turbow for Media Bistro's BayNewser, is a bit of an immediate issue. "Twitter plans," he noted, "to expand from 65 to 100 employees this year, and needs to pay them somehow."
- New Features? Old Users? It's old news that 60% of Twitter users quit within a month, but The Business Insider's Preethi Dumpala and Nicholas Carlson think the figure highly relevant: "the startup needs to add sticky features ... to address that retention problem if it hopes to keep growing like a weed."
- How About New Ideas? Twitter's last attempt at a "sticky feature" fell flat, and Gawker's Ryan Tate blames the geeky founders. He mocked their failed attempt to hand-pick Twitter streams "to push on new users, hoping quality content would prove addictive." Nerds aren't "tastemakers," he wrote. "What, middle America isn't going nuts [over] Twitter-pimped content from Dell Outlet, Guardian Tech or geek-friendly bloggers like Veronica Belmont and Pete Cashmore?"
what happens if an "economic ecosystem" is established around Twitter but doesn’t include Twitter itself. In other words, what happens if hundreds of businesses are created using Twitter’s API but the entity supporting them – Twitter – can’t make revenue or, at least, enough revenue to be viable … For the companies building viable business around Twitter, the fact Twitter isn’t making money has to be somewhat of a concern. After all, you can’t have healthy branches if the tree is sick.