Anyway, I just wanted to comment on this one.

Given that Microsoft valued Facebook at around $15B in Oct 2007, it would seem very reasonable for Twitter to reject a purchase offer of $500mm. After all, accounting for the economic downturn, let’s assume Facebook currently has a valuation in the neighborhood of $5B. I’m fairly certain that Twitter has to be worth at least $2B by that basis, alone.

Also, it’s not unreasonable that if Facebook offered $500mm that Microsoft would offer $1.5B, “just because.” Then again, Microsoft doesn’t like buying companies that it doesn’t understand, so it’d probably just buy a part… to keep the current staffing in place. So, effectively, Twitter’s founders are banking on Microsoft offering at least $500mm for 33% of the business, whereby Facebook offered $500mm for the whole thing.

Assuming that Twitter is able to effectively data mine and has enough storage capacity and computing power to process the information, and they are able to capture at least 80% of the market share held by Facebook, a $1.5B valuation is not so far off. The funny part about this is that if Twitter does accomplish these things, they invariably will destroy the marketability of Facebook to potential advertisers and market research firms. After all, if Facebook can provide X information at Y dollars today, a price war with Twitter could demolish the value of said information by making it available at only Y/10 dollars.

So, effectively, assuming the information gathered by the two sites would generate $700mm of revenue for a single site providing it, the potential loss of revenue ($670mm) would be larger than simply throwing away $500mm to acquire the competition.

Twitter is for telling people what you are doing is more important than what they are doing.

http://www.geekculture.com/joyoftech/joyarchives/1224.html

http://www.geekculture.com/joyoftech/joyarchives/1226.html

“How do you make money from Twitter?
Twitter has many appealing opportunities for generating revenue but we are holding off on implementation for now because we don’t want to distract ourselves from the more important work at hand which is to create a compelling service and great user experience for millions of people around the world. While our business model is in a research phase, we spend more money than we make.”

It appears they are simply putting the parts together at this time, while testing out their software and control protocols. Apparently they are tweaking the system multiple times a day, and focussed on their sign-ups needs first, before doing the back end data collection to focus on their “commercial opportunities”.

Of course this is smart too, as simply having a huge subscriber base is enough to drive up valuation of a company in a buyout situation as well.

You basically have two choices:
You could work really hard, hire 100 people to track all of the gibberish that twitterer’s talk about 24 hours a day, daily, and then plot and graph, and do all of the stuff, that would still be incomplete and then you would still guess about what it all means.
or
You could pay several thousands of dollars a day to Twitter, which then provides you with customized trending information that was gathered in real time, with true trending due to usage, and full access to all datapoints broken down by region, locality, marketplace, demographic information, type of communication device delivery, network accessability type, reaction time to event triggers, positive/negative trending, full useful commentary, request, etc. without having to look once at the gibberish that twitterer’s talk about.

Which would you choose? What would your competitor’s choose?

Demographic data is not considered “private” unless specifically linked to a true users identity, and since most of the account names given are essentially “Anonymous” they are simply data points with responses attached to them.

You can still “vote” for products with your dollars – i.e. buying end products in the end is still the most important aspect of the advertising investment.
Also, if you have never participated in a product evaluation survey, service survey, or other survey process, then it would be exactly the same as it would be if you didn’t “twitter” about everything.

On the “good” side, if you can believe the capitalistic mantra; “Perfect information leads to perfect marketplaces full of efficient and effective transactions for products and services fulfilling needs in said marketplace.”, then this could produce products that people will need in ways that before were entirely “predictive” in the past.

This is what the truly “Value” added component is to these Web 2.0 companies. If the company sees that the marketplace needs x number of y products with z numbers of specific capabilities for demographic A, then the numbers can be crunched and further queries about the utility and value of that product can be easier calculated. If all of this ends up with a positive number, or if it can be attached to some secondary product/service that costs nothing to produce and that ends up making a huge positive number, then the product goes to market, and is consumed without much waste involved.

Of course, that is the perfect capitalistic model, but it would work for a socialist model as well. The difference would be that it would have to break even or serve the “public good” in a way that would “improve society”.

Information is valuable, and 1 billion datapoints per day, could provide valid information quite quickly, if it were truly moving in a detectable direction. So $500 million, may actually be a low bid, and it appears that Twitter, at least believes it is worth more, while at this time appearing to simply be “worthless” (no positive asset accumulation).

And from 20 minutes into the future (or 23 years in the past).
Max Headroom selling coca-cola products:
http://www.youtube.com/watch?v=IzxHDqUz8Sk
Max Headroom on Future Fashion Trends:
http://www.youtube.com/watch?v=1lKrnhafUKc&feature=related

Enjoy! (It was sad that he was quite prescient about these trends.)

Finally some bit of clever niche marketing, capturing and exploiting two distinct market niches, while insulting the other market niche, and getting the general marketplace of able bodied viewers confused at the same time.
Watch & Listen Carefully:
http://www.youtube.com/watch?v=DeA5mg18JWY&feature=related

It frightens me that Twitter users would effectively determine the direction of media, advertising and more. Would the rest of us effectively become second class citizens, whose needs aren’t catered to by business, politicians or the media? Or perhaps we’ll be an elite, spared from all that annoyance.

Google has the underline function, and their public/private web search capacities.
Myspace & Facebook have their own coporate space and tie-ins included in general designed to sell preferences mentioned in the very media that they are providing to all of their consumers directly.
General internet capacities include the pop-up, the scroll over imbedded advertisement, side bars, built in hard to remove advertising video prior to the video you are trying to watch, and many other information gathering subroutines, browser history tie-ins, redirects etc.

Twitter – allows for instant feedback 144 characters at a time.

The reality is, that now as an event is happening, the twitter world now archives all of the feedback comments realtime, that then can be sold directly to companies sponsoring – looking to sponsor, or to the people holding the event/broadcasting the news/putting out the movie/broadcasting the TV Show. No more paying pollsters, and relying on cherry picked Neilsen Rating households, no more need for direct marketing push/pull campaigns. This unleashes the marketers from all of the constraints and gives them unfettered access to the people who are freely commenting on whatever it is they are watching at the time.

Since Twitter has all of the archives of these responses in realtime, they get to set the price for specific feedback, and the datamining that is available from these comments.

Behold what skittles did with their website: http://www.skittles.com

In essence they made their site a twitter wall directly related to skittles, or anything barely related to the candy.

In fact that is what is driving Web 2.0. The fact that every marketing instrument can now become a personalized advertisement, that the consumer can even customize and become a part of with their own interaction. Tied into the burgeoning cellular communication structures and the billions of self-dedicated/self taught 1337 spk spd txtrs, all of those next generation trends and marketing niches literally feed the marketing consumption engine – once of course all of that disposable income comes back to the surface after this recession.

Of course, Twitter and the other sites mentioned above, may add to their selling propoganda/advertising the idea that with the demise of so much brick and mortar in this current recession/depression that their use of digital communication/marketing/social networking may produce Economy 2.0TM as well.

Welcome to the next generation of annoying advertising, specifically chosen by you the, the person being annoyed by the advertising!

Coming Soon!
h– he– here’s M- Ma- Max Headroom from Network 23!
The first artifically intelligent personality generated entirely from cached catchphrases/memes and advertisements passed through mainframes of the internet.
http://en.wikipedia.org/wiki/Max_Headroom_(character)
http://www.crazy4cartoons.com/about_maxheadroom.html
http://www.youtube.com/watch?v=ZEPq0FvFm3g