Tuesday, May 26, 2009

Hey Twitter -- Tweet This, "SELL NOW!"

Everyone is twittering.  I too have joined the Twitter nation.  I tweet, you tweet, we all tweet for Twitter.  32.1 million of us in April, compared to 1.6 million one year ago.

Who can't love that growth?  Something we all envy as entrepreneurs.

But, wait -- there's a catch.  Absolutely no revenues.  No business model.  Nothing.  At the same time, lots of opex.  It takes a pile of money to build a service (that doesn't crash).  $55 million to be exact (that's how much Twitter raised from venture capitalists to date).  And, that's only so far.

Sure, Twitter will try to integrate ads soon a la another company that massively grew for growth sake (anyone ever hear of a small little company called "YouTube"?) -- in the words of one of my kid's favorite authors, the esteemed Dr. Suess, "the company grew biggerer and biggerer."  But, Twitter's revenues will pale compared to the ever-growing expenses needed to scale the service.  And, my prediction is that the Twitter nation will lose steam in its passion and the bloom will be off the rose.

So, Twitter -- here's a tweet in less than 140 characters -- "SELL NOW!  Follow YouTube's lead!"