There is no cognitive dissonance. Twitter makes plenty of revenue - $2.2B in 2015. But Twitter's costs are nonsensically high.

They spent $1.2B on labor and SGA (marketing, sales, rent). They spent $800m on R&D (your guess is as good as mine where this money went, most likely extremely overvalued acqui-hires). They spent $700 on cost of revenue (running servers, hosting fees, electricity presumably - the actual direct costs of providing the service). For a net loss of $500m.

Twitter needs to lay people off and stop spending so much on "R&D". I imagine the company could easily be viable if it downsized.

As citizens we should feel about as bad as Twitter's possible failure as we would about a mismanaged mattress store failing.

I don't think acquihires would count as R&D, acquisitions are booked differently.

My guess is that a large part of Twitter's R&D costs involve initiatives that don't relate to the main site's user experience at all: ads, live streams and mobile apps. Improvements on the sales/admin side for advertisers and content producers can be vital for revenue, but you don't see that if you're a Twitter user rather than a paying customer.

Same with apps: Twitter has Vine, Periscope, and who knows what else in development... But these don't improve the tweeting/timeline UX.

I wonder what is the fewest number of employees needed to run Twitter with some way to financially support itself. Could it reduce to the number of employees as at Reddit and still substain itself?

Whatsapp was having comparable traffic and users with something like 20 engineers. It is not directly comparable, as all whatsapp users at the time were app users whereas twitter's users are web users (more expensive to run). Furthermore, with everything public, Twitter needs a lot more policing than whatsapp ever did. But they can probably reduce their stuff to 2-5 percent of current size and still provide the same service that users get - though it will have to be better engineered than what they are currently running.

How they're spending 30% of revenue on R&D and have little to show for it is beyond me. They can probably cut staff by a huge percentage and there would be little impact on day-to-day operations.

> Twitter undeniably provides value that is impossibly difficult to quantify by any widely-used economic metric (e.g. share price)

Twitter has an 11 billion market cap. The "share price economic metric" values the company at 11 billion dollars. There is nothing wrong that.

Because it doesn't trend upwards it is hard to see the value? There are 4,000 employees dumping their newly authorized stocks on your mom's 401k every single day in exchange for cash. The market still retains an 11-figure valuation for Twitter because there is enough demand for the shares.

First you got to look at who is making money here.

Second you have to look past Twitter's consumer facing product. They have massive infrastructure and massive data and they offer plenty of products from that.

Think about how many little SaaS startups could be inside Twitter hidden beneath that 11 billion market cap. The projects are there, the clients are there.

> Think about how many little SaaS startups could be inside Twitter hidden beneath that 11 billion market cap. The projects are there, the clients are there.

And before they closed down their API those products were actually being built...

because they realized they could make bank selling the promise of those services themselves

> There's a lesson for us here somewhere. Twitter undeniably provides value that is impossibly difficult to quantify by any widely-used economic metric (e.g. share price). It remains a platform where millions of users can interact directly with influencers (or, at least, their social media teams) on a platform that is comparatively less colored by political bias than others.

This won't be taken seriously, but I propose nationalizing it. The world needs a good free speech platform and with the actual requirements of the 1st amendment in place Twitter's banning and censorship practices would have to cease. The world might learn to become more tolerant of diverse opinions and thoughts even if they are "mean."

The alt-right wants to nationalize media outlets in the name of free speech? It's truly a bizarro world these days.

Renaming Twitter to "United States Department of Truth" would be pretty cool though.

Now being a strong first amendment advocate is a position that puts you on the right? Nationalizing things puts you on the right? Bizarro world indeed.

Free speech is not in itself a right-wing position, obviously. But the grandparent poster referenced "Twitter's banning and censorship practices", which is essentially an alt-right code phrase. Combining that starting point with a desire to nationalize a private media company makes for a very strange position.

Really? I am the GP and don't like the alt-right at all. Where is the code phrase book? I'd like to take a look at it so that I don't confuse anyone else.

Fact is, Twitter has banned people selectively not only in the US but also across the world when tweets fall outside an ideological boundary or the views of the local government. As a private company, it's their right to do so but the world would be better served by a platform that guaranteed freedom of speech.

I apologize for making an unwarranted assumption about you. There has been so much talk about "Twitter censorship" where it really seems to mean "Milo Yiannopoulos and Breitbart should be able to continue trolling even when their methods violate Twitter's ToS".