Twitter floats. But there's a problem

It won't make money as easily as Facebook.

Late last week, Twitter officially revealed its plans for a $1 bn initial public offering. For an IPO of this size, alongside a valuation of $10 bn, even though it has never turned a profit, this is pretty punchy. One thing that is for sure, Twitter’s floatation is the most hotly anticipated since Facebook’s nearly 18 months ago. However, once the morning bell has been rung and the hype and frenzy calms down, you can bet there will be anxious stakeholders and investors, keen to see some rapid return.

Such is the scrutiny on it, Twitter has to justify this valuation. And fast. If it is going to be a financial success, it has to monetise its biggest asset, its audience. But this is where Twitter may come unstuck. Similarly to Facebook, it will likely look to advertising to its users to claim revenues – both on desktop and on mobile. It is clearly taking the latter especially seriously, with its recent $350 million acquisition of MoPub, which will certainly facilitate the process of advertising to its mobile userbase. It should also be noted that Twitter has undoubtedly done phenomenally well to recruit over 200 million users into its environment. However, the big difference is that its particular environment is not especially advertiser friendly.

Think how quickly tweets appear and then disappear on a timeline; consider the potentially intrusive nature of ads in your conversation stream. At a moment in time therefore, capturing engagement – so key to targeted advertising –  is limited, which puts the brakes on meaning, purpose and potential wastage.

The additional problem is that this is all happening within Twitter’s own four walls. A tweet can be there and gone within seconds within Twitter, but it can live on across the entire Web in a number of different forms – email, IM link, shortened URL. But Twitter, similar to other noteworthy social networks and portals, is currently not able to engage, target and therefore make money across the open Web, which makes the walled garden it sits in seem even more claustrophobic.

Another major pressure Twitter is facing is, quite simply, the affiliation with the word “social”. There is undoubtedly a sentiment, whether in the City or on Wall Street, that if you are a “social media business”, you are automatically going to be worth billions. The term seems to have become the sole domain of the major networks, such as Facebook, Twitter and Instagram. However, this is not a fair representation of social media. These sites certainly command a great deal of active users, but the truth is they only actually account for a relatively small percentage of what is actually being shared and communicated across the Web. Think how much is shared via other methods, such as copy and pasting, IM and even good old email (which is still by far and away the most used way to share content). The only entity that truly represents global social interaction is the Internet at large. And this needs to be considered when labelling a company as “social”, especially one that has to operate within its own confines. The sooner this recognition starts happening, the sooner the inordinate amount of pressure on networks, such as Twitter, to show instant return will ease.

I’m not saying Twitter will not be highly successful but people have to stop over cooking the dish. This is the largest Silicon Valley offering since Facebook’s last year. And with the limitations it has, it is going to have to work very hard to appease anxious stakeholders wanting to see an early return. Let them exist and be happy as a very successful and smart business but don't hype it and assume they have to make billions in ad dollars!

Photograph: Getty Images

Rupert Staines is European Managing Director at RadiumOne

Photo:Getty
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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.