That seems to signal a lack of creativity. Twitter has nearly 4,000 employees—there is simply no way you need that many employees to run their core services.

Twitter has already done some layoffs, but they could stand to do plenty more. They really don't need more than 1,000 employees.

The company was built with the idea that it'd be the next Facebook but there doesn't seem to be any path to that happening. They need to accept their market position and optimize on profiting from it. Fortunately, unlike Facebook, their core user experience is much simpler and should require way fewer engineers.

Right now they are trying to find other niches to fill so they can continue to grow, they are just not doing it very successfully.

If they actually got to $1.5b annual earnings, they could definitely justify a $12b cap. A P/E of 8 would be ridiculously low for the technology industry—heck, for any industry.

I'm not enthusiastic about Twitter and certainly wouldn't buy the stock, but the company also definitely isn't "worthless." There's certainly a path to profitability.

In this scenario they have fired everyone and given up trying to grow. A P/E of 8 would be way overvalued.

So - sack a lot of people, cut costs, hold cash in the business and disappoint investors... Will the investors wear that though?

I disagree. For one thing, a P/E of 8 is standard for industries which most think are either declining or entirely stable. Benjamin Graham used 8.5 as a "no-growth" P/E so it's hardly insane. [1]https://en.wikipedia.org/wiki/Benjamin_Graham_formula

Moreover, even without feature expansion, I do think Twitter will see growth, though that growth will be minimal. At the very least they stand to benefit from the ever-increasing number of people on the internet.

Anyway, I sold all the shares I could at $51, and then sold everything else at $31, so I clearly didn't feel like the price was worth that, but $12B for the company seems a little low to me. Given current news is likely to be taken as a reason to sell, it wouldn't surprise me at all to see the company get bought. Which I guess could push the stock up a little bit, like it did last week, but it would take months of that to get people's compensation back to where it was with RSUs that were handed out a year ago.

For reference most run of the mill companies trade somewhere around 1x revenue.

Why would their costs go down rapidly; stock based comp? Typically stock based comp has a strike price lower than the current share price. So they save but maybe not as much as the stock price collapse might suggest. Also, they'd still be unprofitable. A lot of professional investors feel they should cut costs, focus on periscope, and start making money off the new organisations that make money off of having access to information now. Things like charging the times and the journal for a live feed from ground action in Syria.

Professional investors should stick to investing, product management is clearly not their strong suit based on this laundry list of proposals. :)

Time and time again, companies come up with supply driven theses that give birth to products that fail. Demand driven products succeed. Knowing when to engage in M&A, sell assets, cut costs, expand to new markets and engage in corporate actions requires judgement that few companies have. It's not always about iterating on the product you already have.

Facebook understands this which is why they have made several key acquisitions. They're looking to be the home of the best innovations in social media; whether it comes from internal sources or external teams.

In Twitter's case, they have hit the limit of mind share in most markets. Everyone knows about it; few on the margin have incentives to sign up. Periscope has potential if data costs come down.

This is why people in industry don't always make it as CEOs. Knowing which game to play is key. Thinking like an investor is key too. Don't take it from me; take it from Buffett.

Then I've read heaps of great ideas here on HN about how they should be leveraging the real-time stream to be the go to place for what is going on for any issue.

What I don't understand is why nothing is changing, I've only been a twitter user for a few years but I've never seen anything change. I think they need to be pumping out lots of little experimental tools for finding, consuming and creating tweets.

This existed as a thriving third-party ecosystem, before Twitter dismantled it, http://www.mathewingram.com/work/2015/04/30/twitters-multi-b...

"Last year, Twitter effectively admitted that it needed third-party developers ... For anyone who had worked with Twitter in the past, however, this was a little bit like Fox Inc. asking for chicken volunteers to help it build a new hen-house. As far as I can tell, there’s little or no evidence that Twitter’s outreach program is working. What would Twitter be like today if it had embraced its ecosystem and tried to build on it instead of cutting it off at the knees? ... I think it would have a lot more goodwill to spend — both with developers and with users — than it does now, and I think many aspects of the service that it is now trying to build up, including smart recommendations and curation, would be a lot better off with outside input than they are now."

Would be a dream job for me to be on twitters payroll building experiments and functional prototypes.

http://files.shareholder.com/downloads/AMDA-2F526X/840118979...

I'm inclined to say the best thing they could do would be scaling down expectations of bubble-level returns and focusing on value rather than screwing with the core service trying for unrealistic returns. The problem is that this would require compensating executives less and we live in a era obsessed with short-term returns.

A few expansion areas come to mind off hand:

1. Media distribution

2. E-commerce (get the hottest, limited supply thing)

3. Events & ticketing

4. Financial market alerts

5. AMA-style Q & As

6. Chat/AI services and integrations

This actually makes me wonder: if you increase or remove the length limits, how well would Twitter work as a private chat platform?

Because compared to the terrible internal "social platform" sites that some large companies run on their intranets, a company-wide private version of Twitter actually seems like a significant improvement. Use lists (including shared lists) as an equivalent to rooms or groups. That would give three different types of streams: your main feed (people you follow from across the company), the groups you watch or participate in (where most of the productive value comes from), and the firehose (to sample what's going on across the whole company).

As a bonus, if you add in a form of federated accounts, this could allow businesses paying for such a service to have a family of verified accounts on the public Twitter, all tied to their domain (similar to email addresses).

The idea may not be too far-fetched as Facebook actually does have an enterprise product, Facebook At Work. I think Twitter is too focused on other things to try it though.

Facebook has a "Facebook at Work" enterprise product and, from what I hear, the company dogfoods its own platform for work as an alternative to email and mailing lists.

6b. "Customer support in a box" services for companies that use Twitter to find and help customers with problems.

7. Micropayments: Twitter could monetize Likes using a Flattr-like micropayment system. Just add a "tip" button next to the heart button, to pay the tweet author $0.01. It could create a virtuous cycle of more tweets, more tweeters, and more idle funds in tip accounts for Twitter to reinvest elsewhere.

Charging for longer tweets (either a flat amount or per char over 140) may be a good source of additional revenue. The majority of "normal" users wouldn't take advantage it, but many businesses probably would.

This would have the advantage of removing the char limit when people want to (enough to pay for it) but without drastically changing the culture since the majority of tweets would presumably still be under 140.

It's an electronic wasteland and not the kind that makes money. I don't see how that ever changes.

If even a smallish percentage of key athletes/celebs/whatevers move exclusively to Instagram or something else, it would seriously disrupt Twitter. IG would love that, in fact.

Plus, how many people with over 10k actual followers are there really? Is $120/year times that number really going to make a difference for the business? Seems cheap and risky simultaneously.

Also, a lot of people would like a better anti-abuse system and some might be prepared to pay for it.

Really? You actually think Twitter has negative value as a company?

They have real revenue. Fire everyone except a few dozen employees to maintain the core services/ads. That'll let you collect at least $100 million in profit.

At a valuation of <$1 billion, Twitter would be a bargain.

I agree with your plan and would likely run the company like that -- except "just maintaining" a social network sounds like a long-term recipe for disaster too.

The share price would also tank with that plan, which of course won't fly being a public corporation. This is why they're in such a rough place.

Would these future innovations alienate their userbase? Well do we have evidence they alienated the userbase previously. I doubt it.

While we can point to scores of #ragetweets about how Twitter is finished, finished, because they have replaced hearts with favorites, those complaints last about 2 days. Another example would be how embedded images would destroy Twitter (people said the same when Mosaic introduced images to the web in around 1994, as far as they were concerned, the internet had jumped the shark).

The fact is, Twitter has managed to slowly add features like hashtags and images without changing the essence of the product, engaged users will stick around if they keep doing so. I'd acknowledge that the one last negative sentiment was one close to HN's heart - the developer/API issues - and they still have to iron that out (so far, @Jack's #HelloWorld initiative from three months ago hasn't yielded). But I'm thinking more about features they can add to the core product.

Fairly obvious, and I think impactful, innovations we will see are:

* Long-form tweets - The 140 limit is confusing to Twitter newcomers. Meanwhile, Medium shows the power of a clean publishing platform where anyone can say something important without having to setup a blog and feel the obligation to keep posting. It helps them find an audience. Twitter has a giant ready population of people with interesting things to say and many of them are already using Twitter to say it, in less than ideal ways (too-long Tweetstorms, screenshots, linking to pastebins and 3rd party long tweet services). Designed right, I think they can introduce this with minimal impact on the normal experience and suddenly become a giant source of substantial content.

* Video - Similar argument to long-form tweets. They have a ready population of potential video makers and can easily find videos an audience. I imagine a lot of people discover YouTube videos from Twitter now; those could be directly served by Twitter in the future.

* Curation - Twitter's model of showing every tweet from every friend is archaic and doesn't serve the needs of most users. If I haven't logged in for 2 days, do I really need to see a blast of trivial tweets from 5 minutes ago? They have made some attempts to improve this (e.g. "While you were away" highlights, which so far are mediocre), but can do a lot more, e.g. showing most relevant/popular tweets from friends (see: Nuzzel) and going beyond just friends' tweets/retweets if something is relevant enough. I know moving to a Facebook-like filtered stream will enrage some hardcore users, so they would need to do so carefully and maybe with settings to keep it the old way, etc. ... but I think it will be a big quality boost for most users and also make native ads more effective.

* Apps - The official apps aren't exactly loved and lack consistency (e.g. Tweetdeck and several other official apps still can't render polls, an important mainline feature for a while now). A savvy product team could improve these across the board.

There are a lot more possibilities, and those are just features related to the core product, leaving aside monetisation opportunities such as buy buttons. Twitter has already moved in some of these directions and the signs are @Jack is intent on accelerating that effort.