Here’s a link to dailyfinance.com and a piece about Twitter’s new ad plan, which you can only be ignorant of if you have spent the last day with your head in a bucket of ostrich poo. The journalist calculates that Twitter needs to make between $146 and $241 million in order to justify the current (and apparently sane) valuation of its service of $1.4bn.
(I cannot help but remember Mark Ritson in Marketing magazine saying – and I’m paraphrasing – ‘Twitter worth $1bn? Bollocks to Twitter!’)
Tha means a revenue of $1.95 to $3.21 per user per year. Which apparently is nothing compared to Facebook’s per user revenue of between $3 and $5. Which brings in more than $1bn a year, for the hard of thinking. (I cannot help but suspecting, mind, that this is nonsense of the horrible horseshit variety, but – hey – that’s just me).
Anyway, suffice it to say that there is an opposing school of thought which says that the Twitterads simply won’t work – no matter what anyone says, it’s not like Google (a search engine) and the ads are limited to 140 characters (difficult to communicate at the best of times). On top of that, these ads rely upon people re-Tweeting them and passing them on – a concept which I, personally, find difficult to understand.
The opposing school of thought also points out that Twitter’s infrastructure costs $25m each year to run. Currently it makes no money at all. It simply HAS to find a way of monetising itself – and no, Biz Stone, there’s no time left to do this in a gentle and questioning fashion. It’s acts together time boys, or you’ll go the way of MySpace, Bebo and Friends Reunited.
In fact, now I think about it – and as predicted on this blog last year – there’re only two social media sites left (when I say left, I mean with any sparkle in them). It’s Facebook and Twitter. (LinkedIn is a business medium – and even that, if you listen to the rumours, is on its way out.)
Two big social media brands, one of which will inevitably be eaten by the other in their rush to ‘monetise’ and justify their valuations.