59 posts categorized "Twitter"

Twitter and idleness

In preparation for my trip to the East Coast next week (I'll be speaking at the Thomson Reuters Online Financial Services Symposium in New York City, and then at the 2014 Angel Capital Association Summit in Washington DC; details in this post from earlier this week), I'm reading Charles Simic's beautiful little volume about Joseph Cornell.

9781590174869_jpg_200x450_q85It's a series of prose poems, I guess you could say, about Cornell's art, but really about Cornell's daily habits, wandering around New York City. Reading Simic interpreting Cornell as an existential presence, you really track how living within the circumference of New York was more than sufficient for Cornell's artistic and reflective life. The outside world reached in through pictures, objects, references, stuff that travelled into the city - like minerals from other planets - and were lost there, for Cornell to find and curate.

Simic picks up on how a life of calculated idleness can engender emotions of the rawest authenticity and, through that meditation and suffering, art of the purest conceptual order.

And somehow all this makes me think of Twitter. (Twitter as proxy for social media, I think.)

My friend Joe Wallin joked some years back that exposing oneself on Twitter and/or social media generally was "a cry for help." I think he was joking, but I appreciate the point and it had a certain ring of accuracy back then.

Not now. Those who may have once been craving attention now want to slice through the noise to get you to buy something, or buy into them.

To use Twitter now other than to promote or advertise is to use it idly, for no real purpose.* Which raises the possibility: is there a Joseph Cornell-like art that can be tweeted to?

But is the idleness of using Twitter (not for PR, and thus, necessarily, by my measure anyway, to use it without direct purpose) analogous to the idleness of wandering around the streets and towers and theaters and basements of New York? Does it, might it, yield discovery, or nurture attitude that might pressure those discoveries into diamonds?

Or is Twitter more like watching cable TV?

It may depend on who you follow in your tweet stream.

*Maybe that's not true; maybe some people have relationships with others that are mediated at just the right equipoise of intimacy and distance through Twitter. I suppose I am necessarily talking about how Twitter seems to function or present possibilities to to me.

Tweeted play-by-play

I'm not a big US football fan, though I live in Seattle and am caught up in the excitement over the season the Seahawks are having.

6a01156e3d83cb970c019b02635c99970c-580wiThe hard part about watching US football games on TV is they take so long and there are so many commercials.

Well, I'm walking home right now, half conscious that the Seahawks are in San Francisco to play the 49ers. And I wonder what the score is.

But by following the Seahawks Twitter feed, I get what amounts to a play-by-play description of the game as it progresses!

Now, all you need to do is attach 5- to 15- second video snippets of the good plays, and there's no reason at all to watch the game on TV.

Dick Costolo's employment agreement with Twitter

I had a brief look this morning at a couple of exhibits in the Twitter S-1, documents pertinent to Dick Costolo's employment as CEO.

Like Marissa Mayer's employment as CEO of Yahoo, and Sheryl Sandberg's as COO of Facebook, Costello's employment with Twitter is memorialized, not in an "employment agreement" per se, but instead in a letter agreement.

6a01156e3d83cb970c019b00714947970c-580wiBut Costolo's letter is shorter, simpler, and, on the surface at least, not as protective of the executive employee's authority.

Conspicuously missing is a "good reason" defined term, commonly used in executive employment agreements to set up severance benefits in the event that an exec's authority is undermined or she is effectively pushed out without actually being fired. Mayer and Sandberg both have such express protections in their respective letters.

That said, Costolo is entitled to severance, per a plan that is referenced by the letter, if he is fired without cause.

The most striking thing about Costolo's letter is his cash salary: $14,000 annually.

This suggests that his real compensation takes the form of equity.

I should of course look at the compensation disclosure in the prospectus to see what those are and how they are valued. But my real curiosity is with the mechanics of the underlying agreements.

It's possible that other terms material to Costolo's authority are embedded in other docs I haven't uncovered.

Twitter's non-asymmetrical business model

I read the "Business" section of Twitter's S-1 last night. Three things struck me.

1. HAPPY TWEETER. I continue to have affection, regard and loyalty toward Twitter. Though I'm not sure about the company currently serving as the steward of the service, Twitter is the only engaging, useful social media tool for me these days. (I still use Foursquare, but not to socialize as much as track and plan my own movements; since that company abandoned the service's "Discover" feature, Foursquare has become more of a diary.)

6a01156e3d83cb970c019b00184970970c2. WHERE IS DON DRAPER WHEN YOU NEED HIM? The commercial tweets featured in the disclosure are banal. One is an ad for Oreo cookies. I like Oreo cookies, but I don't see anything clever about tweeting about Oreo cookies when the lights go out during the Super Bowl. Another is a commercial for Wheat Thins. No question, another familiar consumer brand, but so what? The placement of these ads in the Twitter S-1 must be there for the sake of advertisers and marketers.

3. FLAWED BUSINESS MODEL. The disclosure posits that Twitter isn't a social media service at all, but instead is the next, singular development in the evolution of the Internet. Again, pandering to advertisers. The people I engage with on Twitter use it as a social media service. And here's Twitter's fundamental business problem: by detaching users from the revenue model, Twitter runs the risk of undermining the very asymmetry and user control that makes the service appealing to the users who feed the service with the most original content.

The disclosure virtually apologizes for not generating revenue from users. The cure for that is to go ahead and let users opt in and pay for a version of the service that they may continue to control. Advertisers, too, would be well served by such a move; why should they pay to expose their brands to users who resent the intrusion?

Twitter's business model needs to become asymmetrical.

My Favorite Risk Factors in the Twitter S-1

Yesterday's post laid out five initial thoughts about the Twitter S-1. Here now are My Favorite Risk FactorsTM from Twitter's filing of last week.

  1. "We generate a substantial majority of our revenue based upon engagement by our users with the ads that we display. If people do not perceive our products and services to be useful, reliable and trustworthy, we may not be able to attract users or increase the frequency of their engagement with our platform and the ads that we display. A number of consumer-oriented websites that achieved early popularity have since seen their user bases or levels of engagement decline, in some cases precipitously. There is no guarantee that we will not experience a similar erosion of our user base or engagement levels. A number of factors could potentially negatively affect user growth and engagement, including if . . . users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of ads that we display[.]"
  2. G564001ifc"We seek to foster a broad and engaged user community, and we encourage world leaders, government officials, celebrities, athletes, journalists, sports teams, media outlets and brands to use our products and services to express their views to broad audiences. . . . If we experience a decline in the number of users or a decline in user engagement, including as a result of the loss of world leaders, government officials, celebrities, athletes, journalists, sports teams, media outlets and brands who generate content on Twitter, advertisers may not view our products and services as attractive for their marketing expenditures, and may reduce their spending with us which would harm our business and operating results."
  3. "The substantial majority of our revenue is currently generated from third parties advertising on Twitter. We generated 85% and 87% of our revenue from advertising in 2012 and the six months ended June 30, 2013, respectively. We generate substantially all of our advertising revenue through the sale of our three Promoted Products: Promoted Tweets, Promoted Accounts and Promoted Trends. . . . Our advertising revenue could be adversely affected by a number of other factors, including . . . our inability to help advertisers effectively target ads, including as a result of the fact that we do not collect extensive private personally identifiable information directly from our users and that we do not have real-time geographic information for all of our users [and] the impact of new technologies that could block or obscure the display of our ads[.]"
  4. "In order to deliver high quality products and services, it is important that our products and services work well with a range of operating systems, networks, devices, web browsers and standards that we do not control."
  5. "[W]e face challenges in providing certain advertising products, features or analytics in certain international markets, such as the European Union, due to government regulation."
  6. “'Spam' on Twitter refers to a range of abusive activities that are prohibited by our terms of service and is generally defined as unsolicited, repeated actions that negatively impact other users with the general goal of drawing user attention to a given account, site, product or idea. This includes posting large numbers of unsolicited mentions of a user, duplicate Tweets, misleading links (e.g., to malware or click-jacking pages) or other false or misleading content, and aggressively following and un-following accounts, adding users to lists, sending invitations, retweeting and favoriting Tweets to inappropriately attract attention. Our terms of service also prohibit the creation of serial or bulk accounts, both manually or using automation, for disruptive or abusive purposes, such as to tweet spam or to artificially inflate the popularity of users seeking to promote themselves on Twitter. Although we continue to invest resources to reduce spam on Twitter, we expect spammers will continue to seek ways to act inappropriately on our platform. In addition, we expect that increases in the number of users on our platform will result in increased efforts by spammers to misuse our platform. We continuously combat spam, including by suspending or terminating accounts we believe to be spammers and launching algorithmic changes focused on curbing abusive activities. Our actions to combat spam require the diversion of significant time and focus of our engineering team from improving our products and services. If spam increases on Twitter, this could hurt our reputation for delivering relevant content or reduce user growth and user engagement and result in continuing operational cost to us."
  7. "As of June 30, 2013, we had approximately 2,000 employees, an increase of over 1,800 employees since January 1, 2010."
  8. "There is . . . a risk that one or more of our trademarks could become generic, which could result in them being declared invalid or unenforceable. For example, there is a risk that the word “Tweet” could become so commonly used that it becomes synonymous with any short comment posted publicly on the Internet, and if this happens, we could lose protection of this trademark."
  9. "Our Innovator’s Patent Agreement, or IPA, also limits our ability to prevent infringement of our patents. In May 2013, we implemented the IPA, which we enter into with our employees and consultants, including our founders. The IPA, which applies to our current and future patents, allows us to assert our patents defensively. The IPA also allows us to assert our patents offensively with the permission of the inventors of the applicable patent. . . . While we may be able to claim protection of our intellectual property under other rights, such as trade secrets or contractual obligations with our employees not to disclose or use confidential information, we may be unable to assert our patent rights against third parties that we believe are infringing our patents, even if such third parties are developing products and services that compete with our products and services. For example, in the event that an inventor of one of our patents leaves us for another company and uses our patented technology to compete with us, we would not be able to assert that patent against such other company unless the assertion of the patent right is for a defensive purpose. . . . In addition, the terms of the IPA could affect our ability to monetize our intellectual property portfolio."

On the risk factor about Twitter's innovative IP agreement with its employee inventors, see this prior post, Patent Experts Disassemble Twitter's Employee Patent Assignment.

Five initial thoughts about the Twitter S-1

I've read only the prospectus summary and merely skimmed the risk factors, so the following comments are preliminary.

  1. Respect for users. The drafting in the Twitter S-1 is careful to distinguish between content, which is always contributed by users, newsmakers or advertisers, and products and services, which are the contributions of Twitter, the company. This is important. It may reflect an embedded corporate culture that will save Twitter from Facebook's regressive indifference to user autonomy.
  2. G564001g06x44Asymmetry and mass-reach. That said, products and services impact or potentially even drive what content is presented. The document is tense with conflict between respect for the originating asymmetrical nature of user interaction on Twitter, and an inorganic imperative to make Twitter an effective broadcast channel for brand marketers, political spin doctors, journalists and advertisers.
  3. Spam and advertising. The tension is especially evident in a risk factor about spam. The drafter provides a generic definition of spam that fairly and without irony encompasses promoted tweets.
  4. The revenue model overlooks two of three constituents. The prospectus summary speaks of three key categories of constituents: users, platform partners, and advertisers. The disclosure very nearly apologizes for not generating revenue directly from users or platform partners, but does point out that increased activity by the latter two constituents makes the system more valuable for advertisers.
  5. A hedge against advertising's decline. Question for Twitter: why not monetize directly from users and platform partners? If the fear is, many users and platform partners will not pay, then let those thrifty constituents continue to use Twitter for free, and advertise to them. Consider this move as extending to advertisers, too, Twitter's originating efficiencies of asymmetry: promoters will never have to pay for reaching people who have low tolerance for spam. This move would also be a hedge against the declining value of targeted advertising; and users and platform partners who pay can be charged at least the value they remove from the advertising network.

The importance of Twitter being unimportant

Speaking of Facebook, consider this sentence in an interesting New York Times article about Twitter's anticipated IPO:

"Messages flow in continuously, most recent on top, without regard to their importance."

It's describing how the Twitter service works.

The voice is, of course, objective journalistic indifference (or affectation of such), but how loaded is that final clause, "without regard to their importance."

6a01156e3d83cb970c019aff5d02f9970bThe implication is that each unique message must be evaluated and its order arranged (other than by time) to escape the gravitational shame of randomness.

Or, more insidiously, that user curation (both by sender and recipient, the latter having chosen which users may publish to the stream) does not compute.

An algorithm might rank messages with due regard to importance. The importance to an advertiser, say.

My fundamental problem with Facebook was that I had no idea whose agenda was cherry-picking the stream. I knew the agenda wasn't mine.

Yeah, Twitter has ads. I hate them. I report them as spam. I take modest measures to signal to the Twitter servers that I'm the kind of person they want to go easy on with the ads.

When the Gates Foundation buys Twitter, the company - and why not go public; it will facilitate such a move - the ads will be gone, and we will truly have a messaging service of no importance.

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