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October 07, 2016

Twitter is Bad Data, But is it Good Business?

Jim Kramer last night on Mad Money did a great job talking about why Twitter speculation is probably a bad investment. He pointed out that Salesforce having expressed interest in acquiring the blue bird has had the opposite impact desired by Marc Benioff, CEO of Salesforce. His statement that the new digital currency is Data seems to have driven a lot of his decisions.

However investors, especially the major investors, are revolting and Salesforce would likely take a major hit if it succeeded in buying Twitter.

There are several reasons Twitter is on the ropes and should be a “fire” sale. The premium that almost doubled the stock based on rumors is probably going to deflate fairly quickly.

Now to be fair, Marc Benioff has a valid point about Twitter being a great general data source. As someone who used to work for a company that generated a lot of “damn monopoly” talk, I was shocked when our friends at Towerstream used twitter as a help desk interface. They were able to avoid a lot of call center costs by just putting the staff on twitter to monitor the customer comments and respond immediately. A very public display of customer service.

For customer service, integration with Salesforce would be ideal and could be part of a competitive API strategy with the likes of Twilio.

So I can see Benioff’s vision.

On the other hand, I can also see why the investors are skeptical. Microsoft’s “Tay the bot” that learned to be racist on Twitter is a case in point. While we live in a politically charged bi-polar environment, it’s hard to believe that acquiring this data makes good business practice.

If you want to support acceptable trash talk, the acquisition by Disney for its ESPN and ABC assets might be the best fit for what Twitter is right now. Given the nature of real time tweets and efforts to be in real time, Twitter can be a part of greater media property and if it supports video in the future an interesting opportunity for crowdsourcing camera shots.

Other players like Verizon or AT&T or the other carriers could also make a play, but it’s hard to imagine they will find any real benefit. If the goal is give a facelift to SMS, the better strategy would be for the GSMA and its IPX efforts to reconvene. Perhaps a Synchronous or a Neustar should try to enable some new services in a mature (dead?) market.

I don’t expect Twitter to be sold until this false premium gets eliminated. The return of Jack Dorsey (based on the feedback I got from his appearance at Jeff Pulver’s Monage conference); is that Jeff has more vision than Jack. Perhaps the board should invite Jeff to come and take the reins.

One thing I would do if I were Twitter would be to implement a hate stamps strategy. If you want to right something hateful, you need to buy the use of the offensive word or phrase for some number of tweets.

Based on their current customers and the tone of this election, I would think we would be able to call Twitter a buy after that implementation.

Edited by Ken Briodagh

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