I felt a tinge of sadness in yesterday’s announcement by Twitter that it would roll out a new search-based advertising product. It is as if an era has ended, the era which was defined by not knowing Twitter’s revenue model, while venture investors continued to support a $1 billion valuation. So many of us have been raised in that era, so many entrepreneurs have been inspired by that financial success story, and others. And now, this is it? The social media, the real-time web, was revolutionized, disrupted, redefined, in order to arrive at… search ads? A chapter seems to have been closed, as the rebellious adolescent has reached the age of majority and is settling down in the suburbs to raise a family. @biz is out there planting fertilizer, chatting with the neighbor about schools. Who shall inspire the upstarts now? (Groupon, of course, which is my point. Today’s innovators sell soap bargains.)
One has to wonder, all kidding aside, what would have prompted Twitter to roll out a long-term revenue model at this time, when for so long it had done without. An advertising strategy would only be introduced, one assumes, if shareholders had determined this to enhance the company’s value. But for whom would Twitter’s value increase as a result of advertising revenue? Google, Facebook? Would any strategic buyer, for that matter, look to Twitter for revenue enhancement as much as pure traffic? I tend to doubt it. Then, does Twitter’s new advertising play presage an eventual IPO? This could be the more likely case, and begs the further questions: Did strategic M&A not prove fruitful? Or not fruitful according to the standard that a $1 billion post-money round has set? And is that a statement on the value of pure traffic? In short, was Twitter’s maturation forced upon it by worldly circumstance?
Regardless of such speculations, one cannot turn a blind eye to what is happening in “new media” these days. There is a pattern: As the iPad now prompts discussion of premium apps more so than free sites, as group couponing (see Groupon reference above) and mobile commerce draw upon investors’ new passions, and as even Twitter now has thrown in the towel to join the ranks of the working-stiffs, one senses with more finality than even in 2000 that the web business is entering a new phase. This is the point we have reached, when new media is no longer new, and perhaps the web is no longer free. The issues with which youthful web entrepreneurs are now faced are no longer so different from the issues with which any newspaper publisher or station manager spends days and nights toiling: sales, marketing, and always be closing.
Why, I still remember when Twitter was born. How fast they grow.
