Erick Schonfeld on Twitter’s Future

now Twitter people were sort of raising
eyebrows on going is this a joke when
they did their big deal at a hundred
million I don’t even know if those post
money or pre-money 100 million valuation
they now did a valuation a hundred
million raised at a valuation of the
billion what do you think about Twitter
do you think that those kind of
valuations make sense there’s something
about valuations that it’s almost easier
to get a higher evaluation before you
you have any money before you’re making
any money so if you’re pre-revenue it’s
anyone’s guess as to how much money you
might make somewhere down the road and
twitter has been holding off on turning
on their revenue stream there’s lots of
ways they can make money they can just
plaster the site with ads and they’ll be
start making money overnight I think
they don’t want to do that they want to
find some new way to make money that is
in keeping with the user experiences
they’ve raised so much money they don’t
have to figure that out yet but time is
ticking and now with this new fun you
know investors going to want to see see
what they have not just in terms of user
growth which also is flatlining taking
this engaged audience and then turning
it into either a marketing vehicle to
that audience or or to provide premium
services for corporations that want to
use it you know as a way to reach out to
engage on it I can see a lot of
different ways that Twitter can make
money but I also think that if they had
a revenue stream if they were making you
know even they’re making 20 million
dollars a year for 15 million dollars a
year then that would have given the
investors something to value the company
on it would be some multiple of whatever
they were making and there’s no way that
you would have gotten two billion dollar
valuation so in a way they were smart to
hold off because they knew you know they
have this they’ve been in discussions
with potential acquirers right so either
they they get acquired or they try and
go it alone in order to go it alone they
needed a big chunk of cash so that they
can go up against facebook and go up
against google to sort of build out
their their their system I mean even now
there’s you know it seems like daily or
weekly issues with the with the service
if
needs to scale and be reliable for
whatever reason for this very simple
messaging service that’s a public posi
private messaging service it’s a new
form of communication really I think of
it as this kind of somewhere between
private im’s and and public blogging
it’s like a public IM system everything
on the internet that’s grown really fast
has been some form of communication you
take on media and content to that
communication and that’s what becomes
really powerful you know for me twitter
is a its kind of the backbone of a new
computing infrastructure in a way it’s
not just Twitter it’s this whole idea of
these streams so the information and
that’s why I think you’re seeing
Facebook totally is that what recast
itself is Facebook and Mark Zuckerberg
Twitter Envy is that a smart gut or
strategic decision or direction I’ve
been very impressed with how quickly
that company which is already a pretty
large company has been able to almost
turn on a dime focus on this area either
that’s the right bet or it’s the wrong
bit but obviously the folks at Facebook
believe strongly in the stream as a sort
of metaphor for how you consume
information and they’re emphasizing it
and you know growing faster than Twitter