Why buy Twitter?

Posted by kdow on Sep 15, 2016 10:28:28 AM

There’s a lot of chatter about the potential sale of Twitter around the blogosphere. A lot of this is due to an apparent shift in thinking among the quorum of founders. Most notably, co-founder Ev Williams (who now runs Medium) recently said “the board will consider the right options.” Which is still relatively vague, but not as vague as prior comments that were a fairly substantive “no way, Jose!”

One thing that seems to constantly crop up is their numbers. The number on most sources I read is a fairly definitive 300 million. This is how many people use Twitter, apparently. But as big as that number is, it’s less than Instagram (who should have a fairly niche audience of photo-lovers) and way less than the billions Facebook, WhatsApp & other Facebook-owned properties can tout. And that’s not to mention Asian networks like WeChat!

The other number that’s a big deal for bloggers & journos alike is the revenue Twitter gains. It should be lower than Facebook because targeted ads can only possibly hit 300 million users, rather than a billion. So per-user, Twitter is pretty cheap for a lot of companies. Microsoft is a likely suitor while they’re buying things. Alphabet (if not straight up Google)

But the number masks two big things that stand to reason for the social network: user engagement & ubiquity.

Facebook wins by all accounts, but Twitter’s still important to a lot of people.

I would bet that once someone gets locked into Twitter, they’re in & they get really, hyper engaged. Looking at my own behaviour (caveat: I love Twitter, and have been using it since 2008) I share links, chat to folks and have a lot of engagement on the platform. I would reckon if people get over the hurdle of figuring out what the point of it is (and I reckon a huge number of people drop off immediately after signing in because the value isn’t all that obvious), they’re hooked. Facebook doesn’t have this issue of user churn or deactivity because there’s so many people there that you’ll find value quickly by immediately discovering friends & family.

The other point is ubiquity. Twitter is everywhere. On TV stations they’ll put a hashtag on the screen during a show to drive social engagement. Sure, Facebook has hashtags, but ask 10 people where hashtags are useful, and I would put money down on the majority saying Twitter. Moreover, Twitter’s social share button has a pride of place on as many websites as Facebook’s Like button.

Facebook uses that little icon on other sites to track user interest to influence their social graph. Twitter’s yet to figure that one out (something that astounds me, given their issue with giving users a more immediate hit of value upon sign-up!). But that icon is everywhere.

So when blogs & news outlets tout 300 million users or ad revenue as the drivers to buy Twitter, I scoff. I think their active user engagement and ubiquity (which can be coupled up as “social impact” — without getting too geopolitical about it) is why it’s worth buying Twitter for a brand like Google, Microsoft or some other dark horse (Alibaba?). It’s also why I should probably go buy a few shares… because someone’s going to figure this stuff out soon!