After seven years, Twitter's finally going public. What happens next?
When Twitter goes public this November its initial valuation is estimated to be at least $12.8 billion, but some researchers suggest it could pass anywhere from $20 to $40 billion.
In 2012, advertisers spent $8.3 billion on mobile advertisements, one of the primary modes of money-making Twitter points potential investors to in its IPO prospectus. Investors expect the value of the company to be anywhere from 50 percent to 350 percent bigger than the total market value of its main revenue source today. The stock market runs on this kind of hopeful disproportionality, a triangulation between investors, users, and makers that fixes in place a version of the future while shutting out other possibilities.
The conflation of money and worth is one of the central puzzles of our culture, and the best uses of the Internet have pushed this conflict to a breaking point. As Twitter grew, its value came from its creation of a place where the world could be encountered without the intrusive tint of money. It was the cruddy and disorganized antithesis to the coercive storytelling of magazines and newspapers, with their ideological content silently merging with ads that made a certain kind of lifestyle seem attainable.
Twitter exists in a culture where value is synonymous with money, but Twitter's existence suggests that there are other, more powerful measures.
Unlike the reader of a glossy magazine, who quietly aspires to a certain gloss and sophistication, or of the newspaper reader, who yearns for a polymathic position of empirical authority, the Twitter user came to its stream of non-sequiturs to see how thoroughly these fantasies could be broken apart. The power of this idea has so far drawn 215 million people to participate, a clear testament to the company's value, but also something that poses a problem. Twitter exists in a culture where value is synonymous with money, but Twitter's existence suggests that there are other, more powerful measures.
Taking Twitter public can be seen as an act of abandonment, then, an acknowledgement that the effort to maintain a genuinely useful public service without an obvious way of generating money is impossible. Indeed, Twitter's founders have already moved on to newer projects, with Jack Dorsey helping to run the mobile credit card payment system Square, and Ev Williams working on the essay publishing tool Medium.
In many ways, Twitter is a finished product, like a water faucet or a light switch. There are all sort of iterative embellishments one could add, but the value of the thing is fixed and largely the same whether the hot water handle is wood, metal, round or square. The only thing that remains is the turning of value into money.
Reporting for the Wall Street Journal, Dennis K. Berman points out that Twitter's IPO documents are surprisingly unspecific about how the company will actually make money. It forecasts exponential growth in advertising, but offers few details as to how, promising only to increase its spending on a sales team in the first six months of being publicly traded. Triton Research CEO tells Berman this is like a "car dealer reporting that sales increased because he put more cars on the lot. The cars don't sell themselves." The assumption that Twitter ads will sell themselves, and that they won't have a chilling effect on the network as a whole, is mostly based on faith in commerce on a massive scale.
In taking the company public, Twitter is embracing an ideological point of view that says simple ideas need massive reach to become meaningful, the more popular a thing is, the realer it becomes.
In pure profit terms, Twitter might also choose to charge a subscription fee instead of interrupting one's screen with sponsored posts and promotions. This would be a simpler and more ethical way of measuring the monetary value of the service, and it would no doubt, cause a great many to learn to live without Twitter. But probably enough would remain to make a steady profit for a company that could be as realistically run with 100 employees as with 10,000. In taking the company public, Twitter is embracing an ideological point of view that says simple ideas need massive reach to become meaningful, the more popular a thing is, the realer it becomes.
The paradoxical price of attaining this scale is the forced embrasure of a global network that says the ultimate value of a connected life is in its willingness to buy products. And indeed, the earliest instances of the IPO trace to companies like the Dutch East India Company, an attempt to make permanent the in-roads of colonial exploitation by transferring responsibility for them from government to private industry, where anyone could buy a share could say they were benefitting. This same structure of logic is buried within the American stock market, which makes commerce and advertising seem like absolute necessities for any public undertaking, rather than just one strategy among many.
Twitter's IPO is a kind of self-canibalization in acquiescence to a pre-existing economic order, something it seemed the service originally subverted. By embracing the necessity of advertising, and the inevitability of a market that will become exponentially larger in a few years time, the company is helping to inflate a bubble that, in another time and place, it should have helped pop.
Michael Thomsen is Complex's tech columnist. He has written for Slate, The Atlantic, The New Inquiry, n+1, Billboard, and is author of Levitate the Primate: Handjobs, Internet Dating, and Other Issues for Men. He tweets often at @mike_thomsen.