Benner on Tech: Twitter Storms the News

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About

Is there a word for an event that feels like a tweetstorm, only it's happening in real life? If there is, that’s the word I’d use to describe the last 24 hours in Twitter developments.

A steady stream of headlines have appeared, one after another, to show that the company has plans for more revenue growth and better user engagement.

Yes, this all happened in the run-up to the company’s earnings announcement, which lands tomorrow. Quarterly financial calls have been fraught for Twitter. Wall Street has pressed it to produce monthly active user growth of Facebook-like proportions, but growth has remained stubbornly slow. User growth problems -- and a lot of executive turnover -- have led some investors (usually nameless and faceless money managers who give anonymous quotes to blogs) to say that Twitter should fire Dick Costolo.  

In response, Twitter founders Ev Williams and Jack Dorsey have defended Costolo and his efforts to make the company grow, each in his own charming way.

That brings us back to Twitter’s real-life news storm. These developments take on some of the key criticisms that the company has faced over the past few quarters -- that the site is too confusing for new users, that it provides little value for people who don’t have accounts, and that it would be hard for Twitter to make more money on ads without a surge in monthly active users.

Taken together, the recent stories send a message that seems to say, “Back off, Wall Street. We got this.”

The idea that Twitter could sell ads outside of its platform seems like an especially intriguing rebuttal to user-obsessed investors. If the company doesn't have to serve up ads only on the Twitter platform, it could plausibly argue that it’s not dependent on more users to make the revenue line go up and to the right.

Will Wall Street see these improvements and think, “Geez, we should leave that nice Costolo boy alone and let him do his thing?” The stock did go up on the news. Maybe investors have finally realized that Twitter doesn't need to have (and probably won't have) Facebook-style mega-growth to succeed.

** ICYMI: Read this entertaining, weird profile of the journalists and researchers who work to expose Internet trolls, written by Adrian Chen for the MIT Technology Review.

** And this Pacific Magazine story on why women aren't welcome on the Internet just won a National Magazine Award. 

Ventureland

Detour, a walking-tour app created by Groupon Founder Andrew Mason, is now live in the App Store, Mashable reports.

KnCMiner, a Bitcoin mining company that’s involved in several lawsuits, raised $15 million in Series B funding, reports the Wall Street Journal.

Joe Lonsdale's firm Formation 8 didn't tell prospective limited partners that he had been banned from Stanford University amid the firm's fundraising push, according to Fortune’s Dan Primack. He argues that “a Silicon Valley VC having to avoid Stanford is a bit like a New York City VC having to avoid 5th Avenue,” and that LPs should been told. (I'd love your thoughts on this one.)

Nearly 30 percent of Silicon Valley residents don't make enough money to cover their basic needs thanks to a yawning wage gap, according to a recent report cited by the Wall Street Journal. The median income for high-skilled workers in the Valley is $118,651, and the median income for low-skilled workers is $28,847. The report also found no sign of a bubble.

* Related: Venture capitalists are worried about signs of market froth, reports the New York Times.

Non-U.S. tech companies are better positioned to lead in tech over the next quarter century than American companies, writes the venture capitalist Mike Moritz in the Financial Times.

In one of the best essays about the on-demand economy, Dan Teran, founder of the startup Managed by Q, explains why the business model isn't yet sustainable thanks to a combo of litigation, legislation and a shortage of quality workers.

People and Personnel Moves

Alan Eustace, Google's senior vice president of knowledge, is retiring, TechCrunch reports. He joined the company in 2002 from Hewlett-Packard.

Lee Sang-chul, formerly the head of Samsung in Russia, will now lead marketing for the mobile division, Reuters reports.

Companies

Alibaba…

** LendingClub will replace Bank of China as Alibaba's lending partner to finance bulk merchandise orders, Bloomberg reports.

** The company is testing a drone-delivery pilot program, Tech In Asia reports.

Amazon…

** The company’s first store has opened at Purdue University -- a pick-up and drop-off location that offers free next-day shipping, the Indianapolis Star reports.

** Fortune takes a look at Amazon Prime, one of the company's most crucial customer-acquisition tools and a hugely expensive money pit.

** Bloomberg asks five questions that would make it easier to understand whether or not Prime can be deemed a success.

** Kindle Convert lets users turn books into digital e-books that can be read on the Kindle, TechCrunch reports.

Apple…

** Mysterious, camera-mounted minivans, some of which are registered to Apple, have been spotted in California, AppleInsider reports.

** The company is building a huge enterprise sales team as part of its work with IBM, according to 9to5Mac.

Facebook…

Sony…

The company sold its Sony Online Entertainment unit to the investment firm Columbus Nova, Bloomberg reports. The unit will be renamed Daybreak Game Studio, and it will be free to make games for mobile devices and non-Sony hardware.

Yahoo…

Yahoo Small Business is the lucky unit that will be spun out of Yahoo along with 384 million shares of Alibaba in order to form new entity called (for now) SpinCo, Bloomberg reports. Need a SpinCo primer? Bloomberg View's Matt Levine has one here.

Cybersecurity Watch

U.S. brokerages are more worried about being attacked by hackers and angry employees than about a nation-state attack, the New York Times reports.

PFP Cybersecurity says it can detect possible malware attacks in milliseconds by monitoring changes in the amount of power that devices use, Bloomberg reports.

Media Files

Say Media recapitalized at a valuation that wipes out the $120 million that investors have put into the company, Digiday reports. The former video-ad network is selling its media websites, including Remodelista, Gardenista, ReadWrite and XoJane.

Medium is becoming the White House’s publishing platform of choice, Mashable reports.

News and Notes

** Artificial intelligence research and investment is making a comeback thanks to interest and investment from Amazon, Google, Facebook and Alibaba, Bloomberg reports.

** It only took President Barack Obama, comedian John Oliver and 4 million public comments to push the FCC to regulate broadband access like a utility, Bloomberg reports. My Bloomberg View colleague Justin Fox lays out how the cable companies brought this on themselves and what sort of yelling and litigation will happen next. As predicted, AT&T is all set to file a lawsuit over the FCC’s net neutrality moves, Ars Technica reports.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.