Fixing Twitter

| About: Twitter, Inc. (TWTR)


Twitter's problems began with its rejection of developers 5 years ago.

Twitter's user interfaces can't handle volume, bots, or trolls.

Jack Dorsey ignored the key tech lesson of the last decade. Fire him.

During the second half of the last decade I covered the open source beat for ZDNet.

I covered the war between proprietary and open source development models. Open source won. Today every scaled company understands that what they offer is a platform, one that they can't hope to extend or even successfully debug without the help of outsiders. Even Microsoft (NASDAQ:MSFT) gets that.

Twitter (NYSE:TWTR) still doesn't.

The story began back in 2011, when Twitter told developers to stop creating new client applications for the service. Later it bought client apps that seemed popular at the moment, like Tweetdeck and Posterous. These apps then went away for lack of upkeep.

Twitter seems to think that its data is its product, that the tweets generated by users, then aggregated by marketers, represent the only path to financial success. But while aggregation may be one way to monetize the concept, it's not the product.

Users, and their interactions, are the product. There are two types of Twitter users - big ones and little ones. Big ones are celebrities, like Donald Trump, Leslie Jones, or (on this beat) Jim Cramer, people who offer to interact with their followers. Small users are people like you and I, who seek connections with big users and try to build our own audiences.

Twitter's problem today is that big users, the people who attract the small users, are abandoning the platform. Even Trump uses it as a one-way medium, blasting at an election audience but not reading his feedback. That's due to its volume. Better client software would aggregate that traffic and report on it in bulk, and highlight individual messages of interest. It would do the work of an administrative assistant, but that's what machine learning is all about.

There is another type of software that Twitter desperately needs. That is software that would kill bots - fake user IDs that can be created in bulk - and trolls - individual users with malicious intent. During 2016 the two trends have been combined and weaponized, destroying Twitter's value as a communication medium in the process.

Consider what happened to actress Leslie Jones this year. Her social media feed was attacked viciously by "trolls," writing hateful things about her, after she co-starred in the re-boot of Ghostbusters. One response was a personal meeting with Twitter CEO Jack Dorsey, who removed several accounts from the service.

But Jones doesn't need an apology. She needs software. Dorsey's Twitter has been unable to deliver that software due to their rejection of the open source model.

Frankly, I never got why some on Wall Street considered Jack Dorsey some kind of genius-savant. He is good at coming up with entrepreneurial concepts, true. But he's terrible at executing on them. He's the kind of guy who should be creating new companies and selling them, not trying to build them into great companies.

By failing to heed the lesson of the last decade Dorsey has created an uninvestable mess. Technology investors should only invest on open organizations, and the more open, the better.

If a company that understands the open source concept, like Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) or Facebook (NASDAQ:FB), were to see an attractive price in Twitter, say about one-third less than it's currently selling, they could do something with it, using the open source model. But you can't speculate on that.

Disclosure: I am/we are long MSFT, GOOGL.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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