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Why Twitter Shouldn't Sell

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Sarah Lacy, as we were taping her Tech Ticker video show earlier today, asked me about San Francisco-based startup Twitter and its rumored fundraising effort, which would value it in excess of $250 million. Should the company, she asked, put itself up for sale? My answer was “it depends” — on whether Twitter sees itself a service or a platform that would help foster a lot of services on top of itself.

Later, Lacy wondered if Twitter should sell (out) to Facebook or Google (s goog) or someone else. And now Kara Swisher is wondering if someone should take another run at the company. As I told Lacy, Twitter needs to swing for the fences. Ev Williams already has a notch on his belt — he sold Blogger to Google — and doesn’t need to cash out now. In the meantime, venture capitalists are lining up, ready to fund the company. In other words, he should go for gold.

Twitter, like Facebook, is on the leading edge of the real-time web, which is itself comprised of social micro-content. Thanks to the proliferation of personal Internet devices, digital camera phones and other such gizmos, more and more people are expressing themselves online by sharing photos, videos and of course sending out tweets. Nearly 150 million or so folks use Facebook as a repository of their digital lives, using the service to transmit the information to their friends and family (or even random people.) 

While Facebook’s system is closed, startups like Twitter and lesser-known FriendFeed have an opportunity to create more eclectic environments that blend the best of the web. Twitter has the opportunity to help foster a more democratic ecosystem in which multiple Twitter feeder services can live off the platform. A good example would be Twitpic, which allows you to share photos with your Twitter friends, and has seen huge growth in its traffic over the past few months. With more add-on offerings, Twitter will help encourage more such live content.

Like a torrential downpour, the ensuing data flood caused by live content is going to require a new kind of search methodology that can also help put context around this information. With this in mind, last July Twitter acquired Summize, a search engine that could sift through Twitter data streams and make sense of them. (Related post: Can Serendipity Make You Rich?)

Of course, since Ev & Co. are the ones running the company, they could opt to take the easy way out.

Watch yours truly on Yahoo’s Tech Ticker talking about Twitter.

16 Responses to “Why Twitter Shouldn't Sell”

  1. Twitter is neither a Service or a Platform. Like most of the www, it is like a TV Program… not a TV, not a network, not a studio. It will have it’s day in the sun, and fade away. Which doesn’t mean to diminish its value… shows like M*A*S*H, 60 Minutes, etc. have been profoundly influential and made lots of money for their creators. But it’s time investors begin to recognize this finite horizon, and stop acting as if these freebie businesses are establishing a meaningful future.

  2. why sell the company when the company is already penetrating the other company like a good neighbor with cakes and brownies chilling with a sip of tea inside the neighbors house. As my friend would say “nah i mean?!?”

    If twitter gets sold to facebook, it’ll be forgotten in a short time like the other applications that are available in there.

  3. Yes, please sell the most useful tool to come along in 10 years to Facebook ( and their pimp Microsoft ) so they can destroy it and make it a useless part of their walled garden.

    end sarcasm.

  4. Twitter is a mediocre product that won’t have much life once it is sold to another company. It felt old fashioned compared to Jaiku over a year ago and it feels outdated compared to friendfeed. I don’t see the appeal of anyone using twitter once it’s been sold, especially to a company like facebook.

    It would simply fade away the same way as Jaiku before it.

  5. @Sanjay and others … when it comes to building a sustainable and long term viable company, nothing is easy and a lot has to go right for the company.

    I think what twitter now has a springboard. They are at the right place at the right time with the right amount of momentum.

    The trick is to turn this into a big business, not be just cute and trendy service. It is up to the team to make that happen.

  6. silicon valley dropout

    sell. sell. sell.

    their growth looks good now but there is no telling what may happen tomorrow. looked at digg they were the hottest web2.0 company and could have fetched a ton but they waited too long to sell and even google barked at buying them for 200 million +.

  7. The question really is whether they are enganged in creating an long term viable company in which case they should not sell but concentrate on developing a revenue model whch will value it more than the $250 million and keep tit vialbe in years to come. A tall order indeed but achievable. This is the best thing about being an visionary

  8. Twitter should just become an API company and charge developers to use its API above a threshold.

    I agree with Om : on the difference of Services and Platform. It should view itself as a platform and let others build services around it.

    Get the Cost structure down by focusing on API’s only. If they try to go the exclusivity way – it will kill twitter

  9. Very interesting point that they are not worth so much if they are not a Platform so much as a service.

    However, how will Twitter support this process of building a platform, and monetizing the growth on/around that platform? Why not control the platform through the apps. How and why has fb done this so much more effectively, and why don’t Twitter tie this all up for the sake of their own sustainability?

    So their media attention doesn’t justify the value, neither does the old adage that it’s what people are willing to pay, Then how are they coming up with these figures? It would be great to see the experts break this down like on TC in June:

    @ Rakesh – yes, so then what is their revenue model? Anyone?

  10. But Twitter still doesn’t have a solid revenue model which might as well require them to get some cash to burn off until they come up with one.

    Ads might just prove to be a big no-no, so let’s see.