The bidding for Twitter is heating up. The Wall Street Journal is predicting a price of about $20 billion. What’s worth so much?
Vanity Fair’s Nick Bilton painted a devastating portrait of the years-long dysfunction inside the company. Here’s a sample:
But in between all of those reasons [that previous bids to buy it failed], there remained one constant at the company: Twitter was a hothouse that succeeded in spite of an undercurrent of chaos, consumed by furtive battles over power and control and subsequently, vision. (Was it a social network? A media company? A messaging platform?) Into this void, Twitter, which became all of those things and more, also became a haven for excreta. And whoever was running Twitter, which has essentially had five chiefs in its decade of life as a company, wanted to prove that they were the ones who could tame the beast and solve all of its problems. This chaos, perhaps more than anything else, is what really stopped potential suitors from swooping up Twitter—and for a long time, that was just the serendipity of the situation.
In the same article, Bilton says “Someone very close to Twitter recently told me that if it wasn’t for all the rumors around an acquisition, the company’s stock would likely be in the low single digits.” That’s the fate you’d expect for a company with impaired vision and years of losses.
Except for the data.
In a remarkably prescient report that Jeremiah Owyang wrote for Forrester Research in 2009, he predicted that the long-term value of social networks like Twitter was in what they knew about their users — data that’s most valuable to companies outside the social network itself.
When companies like this get sold, any assumptions about how users get treated are subject to change. In this case Twitter is not viable as it is. I can make two predictions about how things will change (and they’re a lot easier than they were when Jeremiah was predicting).
- Twitter will begin to monetize its power as a mouthpiece. Twitter is at its best providing celebrities with a way to speak to the world. What’s the price at which Kim Kardashian and Lady Gaga would no longer be willing to pay talk on Twitter? $100. $1,000? $100,000? Twitter will charge a price for popular people to broadcast to their followers. Less than 10,000 followers: it’s free. More than 100,000? You’re going to pay.
- Twitter’s data will power something. Facebook knows an awful lot about you, but it’s not sharing that information. But if Twitter becomes part of salesforce, your Twitter history will power salesforce’s targeting. This is why Salesforce has the inside track here — because that data is more valuable to Salesforce than to anyone else. If Google buys it, the rationale is the same. If Facebook buys it, the rationale is to keep the data out of anyone else’s hands.
You, the everyday user, could dump it. Lots of people have. But if you want your fix of tweets from Donald Trump, you’ll have to stick around. And Twitter and its new owners will be watching you.
Count on it.