So Twitter is planning an initial public offering at $1 billion, with an implied value for the whole enterprise of almost $13 billion. With more than 215 million monthly active users, that’s about $60 per Twitter account.
Of course, that number is expected to grow -- we’re not just valuing the enterprise on the basis of the accounts the company has today, but on the number of people it may expect to sign up in the future. On the other hand, it seems worth looking at today’s Twitter accounts because ... well, have you seen some of them?
Take my favorite Twitter account of all time, @Horse_ebooks. This was one of the most elaborate viral pranks of all time. @Horse_ebooks was widely supposed by its more than 200,000 followers to be a “bot” -- an automated Twitter account that mechanically reposted text from other sources, in this case, apparently random bits of text scraped from other websites.
Most bots are more sophisticated than this -- they basically scrape the Twitter feeds of reputable tweeters and repost links or tweets. But the total lack of sophistication displayed by @Horse_ebooks was its charm. Some selections: “And Gain Power By Learning Ways To Become Peaceful”; “Then I decided to try an experiment and put all of my hard work to the test. The next morning I got up and walked straight to my computer ...”; “AND BURNED BY UNSCRUPULOUS BUSINESSES MORE TIMES.” I’m not excerpting; these are the entire tweets. It was like taking a micro-holiday from your workday. There you were, sitting at your desk and then suddenly, for three seconds, you were catapulted into an alternate plane of pure randomness, a vast savannah of serendipity. And then, just as abruptly, you boomeranged back to your seat and resumed work, curiously refreshed by your travels.
Sadly, this turned out not to be a bot, but the creation of two writers, who ended the project in September. That is, I don’t mind so much that it wasn’t a bot, but I do wish they were still tweeting.
This illustrates a few things about Twitter. The first is the ubiquity of bots (that’s why so many of us so easily went along with the deception). The second is the problem of selling advertising based on Twitter accounts, which is that @Horse_ebooks is probably not in the market for goods and services. Neither are the millions of bots that it emulated. It’s hard to know exactly how many junk accounts there are on Twitter, but reporting by the Wall Street Journal, and personal experience, both suggest it’s a lot.
And junk accounts aren’t the only problem. I have two Twitter accounts. Both are perfectly legitimate -- one is the private account I use to notify friends where I might be brunching, and the other is the public account I use to harangue you guys about stuff. (@asymmetricinfo, for anyone who would like to follow it, she said demurely.)
But you can only sell stuff to one of me. Which one? Do you have to pay to blitz me twice? Worse, from the perspective of an advertiser: How do you know that there’s only one of me to sell to?
That risk -- the inability of even knowing how many eyeballs you’re actually hitting -- will probably cause Twitter advertising to trade at a discount (as will the other difficulties that I outlined when the IPO was announced).
So here’s what you need to ask yourself if you’re thinking about buying into the Twitter IPO: First, how much do you think those account figures will grow and, second, how high will the quality of those accounts be? Twitter doesn’t just need millions more voices shouting into the ether; it needs millions more readers taking in those messages. And it needs to be able to prove that those people are actually listening.