Microblog pioneer Twitter is reportedly seeking a buyer, and Disney, Google and Salesforce have been mentioned as suitors. If such a deal happens, the valuations are likely to be much lower than those Twitter received when it went public in 2013. Social media is much further down the road to maturity and Twitter appears to have hit a wall in terms of growth. In 2013, Twitter had $316 million in revenues and net losses of $79 million. But it was a pioneer. It had created a new social media paradigm. The IPO sold at $26 a share and listed on the NYSE at a huge premium, closing at $45 on the first trading day. Twitter is now a market leader: It had over $2.2 billion in 2015 revenues; the brand is in the same dictionary category as "Xerox" and "google"; and a presence on Twitter is indispensable for businesses, governments, and ambitious individuals. But the stock now trades at $23, and that too after gains on the takeover rumours. Revenue growth has slowed. User growth has slowed. Net losses amounted to $521 million in 2015. As such, the challenges involved in monetising Twitter are better understood. It is quite likely that the founders themselves did not realise the value of their creation when it was launched in 2006. By 2007, it was registering about 400,000 tweets every quarter. Then the growth went exponential. There are now 500 million tweets on an average day, with occasional news-based spikes. Active users per month hit 100 million in 2011, and 302 million in June 2015. But growth has slowed since then, with only 313 million active users as of June 2016.
To be sure, Twitter holds great value. The platform sells advertising and promoted tweets. It is a major channel for marketing, customer feedback, and repair and maintenance responses for companies. It generates huge data via search. It is a treasure trove of archived tweets centred on hashtags and events spread across the news cycle of the past several years. It has been a useful tool during disaster relief operations. It is anonymous and easy to access even where it is banned by undemocratic regimes. This helped make a difference during the so-called Arab Spring and in the Ukrainian Orange Revolution. The dark side is that Twitter is also a haven for the cynical manipulation of public opinion and a happy hunting ground for anonymous trolls who abuse, bully and threaten people.
Any potential buyer must have a specific strategy for using Twitter and monetising it more effectively. Google, for example, could use it to enhance social media and cross-sell advertising on its search engine and YouTube. Salesforce may focus on customer service communication and data-mining for business insights. It is a truism that technology pioneers are often beaten by later entrants who carefully observe the pioneer's game plan and improve upon it. This may well happen to Twitter. Facebook is said to be building a similar service. Chinese Weibo is looking to go global with its English language platform. If Twitter is sold to a new management with deep pockets and fresh ideas, it might have a transformative effect and end this period of apparent stagnation.
