Twitter: Years After the Alphabet Acquisition(medium.com)
medium.com
Twitter: Years After the Alphabet Acquisition
https://medium.com/@karan/twitter-years-after-the-alphabet-acquisition-3f5b5b168fb5#.60mrti2fe
46 comments
Way overpriced. All the cool kids are using GnuSocial/OStatus anyways (https://en.wikipedia.org/wiki/OStatus).
This is an unreal post: "When Alphabet bought Twitter back in June 2016 for almost $29 billion", you can easily check Twitter valuation at $10 billion here: https://www.google.com/finance?q=NYSE%3ATWTR&ei=gHO_VpH9GsnB... so... spending 3X the public market valuation will be crazy.
And speaking about science fiction, what will Alphabet/Google do to turn around Twitter?
Also the posts saying: "I quit Facebook" are nonsense, how many people around you removed themselves from FB? Most probably, very few.
And speaking about science fiction, what will Alphabet/Google do to turn around Twitter?
Also the posts saying: "I quit Facebook" are nonsense, how many people around you removed themselves from FB? Most probably, very few.
Twitter's market cap was twice as large as recently as October 2015. The current market makes it very hard to guess where tech companies are in 6 months.
> spending 3X the public market valuation
Just last year, Twitter’s market cap was more than double what it is today. Since then, they have managed to grow revenue by 48% while reducing the losses by 9%. So, with all that, I think $29B is a steal for the acquisition.
EDIT: my last response here was uninformed.
> And speaking about science fiction, what will Alphabet/Google do to turn around Twitter?
Clearly you have not read the post, and are jumping to conclusions.
Just last year, Twitter’s market cap was more than double what it is today. Since then, they have managed to grow revenue by 48% while reducing the losses by 9%. So, with all that, I think $29B is a steal for the acquisition.
EDIT: my last response here was uninformed.
> And speaking about science fiction, what will Alphabet/Google do to turn around Twitter?
Clearly you have not read the post, and are jumping to conclusions.
If it is an early stage company that has the ability to not just increase revenue/customer but also total number of customers.
Also the competition in the bidding process matters. There are a limited number of players who can/will swallow an acquisition this size. Public companies never get bought for these numbers. Why would Google bid that when a 30-40% premium would be enough for most shareholders to vote yes?
On twitter itself, I feel the quote, "clown car that fell into a goldmine" attributed to mark zuckerberg is pretty appropriate.
Also the competition in the bidding process matters. There are a limited number of players who can/will swallow an acquisition this size. Public companies never get bought for these numbers. Why would Google bid that when a 30-40% premium would be enough for most shareholders to vote yes?
On twitter itself, I feel the quote, "clown car that fell into a goldmine" attributed to mark zuckerberg is pretty appropriate.
I don't have numbers, but a lot of shareholders are still out of the money - they bought when the price was climbing from ~40 to the peak of 70.
I doubt that a 40% premium will be enough. But I can see your skepticism. A lot of acquisitions never make sense.
I doubt that a 40% premium will be enough. But I can see your skepticism. A lot of acquisitions never make sense.
It would most likely not get past Google's board. And investors would crucify them for paying that kind of premium for a stalled social network (aka don't get the incremental benefits of growth via network effects). They would be left with 1) increase revenue/user or 2) cut costs.
Periscope doesn't fulfill the "toothbrush" principle, aka stuff that you use every day. That's how Google does M&A. Their corporate development people have talked about it publicly.
Also, the shares turnover every 26 days given that about 26MM shares trade every day. Hard to say that a majority of the shareholder base would not accept a 40% premium.
Periscope doesn't fulfill the "toothbrush" principle, aka stuff that you use every day. That's how Google does M&A. Their corporate development people have talked about it publicly.
Also, the shares turnover every 26 days given that about 26MM shares trade every day. Hard to say that a majority of the shareholder base would not accept a 40% premium.
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> 3x is not a crazy multiple for a company that has grown revenue by 48% and decreased losses by 10% (yoy)
Tell me please of other public companies which also were acquired by public companies for that multiplier.
> Clearly you have not read the post, and are jumping to conclusions.
I read the post and it offers a childish reason why Twitter should be acquired by Google.
Tell me please of other public companies which also were acquired by public companies for that multiplier.
> Clearly you have not read the post, and are jumping to conclusions.
I read the post and it offers a childish reason why Twitter should be acquired by Google.
Googling for "premium on the stock's previous closing price" reveals a few non-tech deals, none of which are above 1.5x
I think ^^ is the guy who wrote the post. But he is still off the mark.
See my edited response in the parent comment.
I don't know about childish but the argument seems very 2012 or something. Twitter is going to keep bigger 'cause social is the thing! That's it?
It seems like there's good evidence that Twitter is limited by the Twitter - most people don't like to scream at the world (post a stream of public crap) and for those that do, Twitter is kind of the lowest quality pedestal to stand while you do so.
It seems like there's good evidence that Twitter is limited by the Twitter - most people don't like to scream at the world (post a stream of public crap) and for those that do, Twitter is kind of the lowest quality pedestal to stand while you do so.
> how many people around you removed themselves from FB?
Almost everyone, it's becoming a ghost town on Facebook proper. Whatsapp/messenger/instagram not at all, but few of my 300+ friends really use it that much any more.
Almost everyone, it's becoming a ghost town on Facebook proper. Whatsapp/messenger/instagram not at all, but few of my 300+ friends really use it that much any more.
> Almost everyone,
And what do they do? I mean, are they distributed into many different occupations?
And what do they do? I mean, are they distributed into many different occupations?
I think he's assuming the market will turn around, or at least Twitter will turn around enough that it's an attractive acquisition target.
$29b in cash and stock?? Man, I'm really looking forward to the 150% run up in TWTR before Alphabet makes that $43 tender offer. brb calling my broker
From the article: "Twitter is live".
Now that's a useful concept to focus the business. That tells Twitter what not to do. Twitter should do only things that are happening right now. All retrospective uses of Twitter data would be via Google and Google accounts.
Monetization of Twitter might not involve ads on Twitter. Google could data-mine Twitter for ad-targeting data. That might be more useful than "paid tweets".
Google's AI capabilities could be used to digest the Twitter flood and create news alerts. A Google Maps overlay of where things are happening on Twitter right now, for example. Enough activity, and a Google satellite (yes, Google has their own spy satellites [1]) would focus on the target area as soon as possible.
This could work out.
[1] http://www.bloomberg.com/news/articles/2014-06-10/google-buy...
Now that's a useful concept to focus the business. That tells Twitter what not to do. Twitter should do only things that are happening right now. All retrospective uses of Twitter data would be via Google and Google accounts.
Monetization of Twitter might not involve ads on Twitter. Google could data-mine Twitter for ad-targeting data. That might be more useful than "paid tweets".
Google's AI capabilities could be used to digest the Twitter flood and create news alerts. A Google Maps overlay of where things are happening on Twitter right now, for example. Enough activity, and a Google satellite (yes, Google has their own spy satellites [1]) would focus on the target area as soon as possible.
This could work out.
[1] http://www.bloomberg.com/news/articles/2014-06-10/google-buy...
I really hope google will buy twitter so it can put back real time search in twitter stream a few years ago as an experiment.
I hope they buy it for a different reason: so they could drain this useless sea of vapidity and narcissism, and drive the company into the ground within 3 years tops. Or maybe Dorsey will do it on his own, who knows. Twitter's chance of death goes up dramatically if it's not a standalone entity.
> Twitter's chance of death goes up dramatically if it's not a standalone entity.
Currently the whole TWTR management is looking to please short-term "investor" and "speculator" scum.
Companies don't exist for 3-month intervals and maximum gains, they exist for creating LONG TIME wealth (and that's the mistake Capitalism does).
Existence inside a huge, rock-solid company frees management from the cognitive and financial round to be hyper-effective for capitalists instead for their users (who actually create the work that makes Twitter exist).
Currently the whole TWTR management is looking to please short-term "investor" and "speculator" scum.
Companies don't exist for 3-month intervals and maximum gains, they exist for creating LONG TIME wealth (and that's the mistake Capitalism does).
Existence inside a huge, rock-solid company frees management from the cognitive and financial round to be hyper-effective for capitalists instead for their users (who actually create the work that makes Twitter exist).
It also frees the management from "fear of God", which results in ridiculous investments and initiatives, accelerated (and unnecessary) hiring, proliferation of middle management, empire building, politics, etc, etc.
> It also frees the management from "fear of God"
It doesn't really matter if the "God" is Wall Street or a holding company like Alphabet.
Only that I'd trust a holding company to be forced to maintain the company in order to not risk its value. A stock holder on Wall St just wants as much profit as possible as fast as possible, and if it goes bust then you can always sell shorts and still profit.
It doesn't really matter if the "God" is Wall Street or a holding company like Alphabet.
Only that I'd trust a holding company to be forced to maintain the company in order to not risk its value. A stock holder on Wall St just wants as much profit as possible as fast as possible, and if it goes bust then you can always sell shorts and still profit.
It does. Alphabet would care a great deal more if Twitter lives or dies. Wall St doesn't care in the slightest.
On the other side, Google doesn't always follow this rule and I wouldn't trust them much more to look after Twitter than Wall St.
Google has killed off (or left to rot, and then kill off) projects with huge user counts/business outlooks in the past... remember Google Reader and Google Code?
Both could have kicked Feedly's and Github's/SF's asses multiple times over with a bit of investment, and Google basically let them rot until the backend of Google's infrastructure changed too much to justify the needed adaptions on the projects.
Google has killed off (or left to rot, and then kill off) projects with huge user counts/business outlooks in the past... remember Google Reader and Google Code?
Both could have kicked Feedly's and Github's/SF's asses multiple times over with a bit of investment, and Google basically let them rot until the backend of Google's infrastructure changed too much to justify the needed adaptions on the projects.
User counts were so pitifully small in those projects that they were destaffed for years before they were shut down.
Reader had iirc at least a million users, that's only small when you compare it with FB/Instagram/Twitter/Youtube/Snapchat.
Most startups would kill for a million highly engaged users.
Most startups would kill for a million highly engaged users.
I believe G+ had 300M+ users at the time, and G+ was still considered a failure. 1M is a rounding error by Google standards. They can get 1M users by releasing _anything_ that does _anything_ at this point.
They could also just pay Google to develop that feature for them. Cooperation doesn't have to happen only by acquisition.
So Periscope and Moments would be the saving grace of Twitter? On what planet does the author live?
Moments is pretty amazing. Have you used it? Seems to me like it is miles ahead of snapchat's stories
I have. Gives me a bunch of bs I have no interest in. How about ask me/infer from who I follow, what I'm interested in? Google now does that and blends it in with more general stories; simple and useful. Not intrusive and useless like moments.
Apples and oranges. Snapchat is personal, moments is more like news.
How much have you used the two products?
In a similar vein: https://www.destroyallsoftware.com/talks/the-birth-and-death...
You have a typo, in the section about Twitter's business tools you said they have '"millions of" of users'.
Good catch. Thank you
Ha ha...April Fools came early this year
I think you mean it came early next year.
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