Right now the hottest company in Silicon Valley is Twitter, the micro-blogging, 140 character, company… as in:
“I’m eating toast right now”.
Having been in the web industry 15 years now I’ve seen this movie before. Sometimes it’s a double feature: 1) buzz 2) success as a company with revenue and earnings. The movie is still going, it can end like this:
Or it can end like this:
Right now Twitter is just buzz. Lots of celebrities (some new and some you forgot about or want to forget about) are using Twitter. Twitter itself promotes a handful to new users.
In his heyday (1990) I don’t think 200,000 people would be interested in MCHammer’s vitamin habit. And I like Hammer, saw him perform back in the day. But seriously, his daily updates are “took vitamins, heading to soccer game”.
Where are the Hammer baggy pants when you need them?
If you don’t know (or care) what Twitter is here’s the lowdown: it lets anyone share what they are thinking, doing, making, promoting, etc. in 140 characters (or less) and then have others subscribe to those updates. Basically, SMS meets the Web. Or the newfangled news groups, for those of you who’ve been on the Web since the early days.
From my experience and observation (cutting through the hype) it’s basically a modern-day PR service that people basically use to promote themselves or their company, etc.
Twitter just raised another $35 million from a group of venture backers that swear they focus on revenue and earnings, despite Twitter having none of either.
I’ve seen this movie many times:
* Netscape (owned the entire web, its browser was the default. Microsoft beat them and Netscape didn’t see the website itself as a business until it sold traffic to Yahoo and others).
* AOL (blanketed Earth with sign up disks and bundled itself with Windows in a deal with the devil in 1996. Time Warner was its hemlock).
* Alta Vista (the geek’s preference for Web search from 1995 – 2001. Got tangled up with Digital/Compaq and mangled in a body slam from CMGI).
* Blogger (hottest blog platform, sold to Google and lost its unique brand ID. Same guys founded Twitter).
* Skype, the #1 free web-based phone service, sold to eBay and stopped innovating. Now emerging as a player again thanks to iPhone wifi phoning.
With every twist and turn, technology companies hit crossroads and take the better path or they lose focus and dwindle an opportunity.
While some observers think Twitter should sell to Google, my advice to the Twitter founders (which I already shared with them) was this: just license the search on Twitter to Google and make Google pick up Twitter content for use across Google search and YouTube. Price?
charge Google $250 million per year for this.
This is a similar deal News Corp. CEO Rupert Murdoch did. He sold MySpace search to Google for $900 million license fee.
I like Twitter and believe a gem could exist if it’s smart about the future, smart about ways it grows. If not…then the movie ends there.
While the US media is gaga for Twitter what really caught my attention this week was Changyou, a Chinese online video game service that was spun out of Sohu (SOHU). While US media keep crying about how bad the economy is I believe they are behind the times. They’re
chasing a story that peaked November, 2008.
Anyway, since I prefer to live in real-time here’s the scoop: Changyou went public April 2 on NASDAQ and closed its first day of trading up 25%. Changyou raised $120 million.
Changyou makes and runs popular online multi-player video games. Its best-known game is Tian Long Ba Bu. Here’s a screenshot of the game:
Changyou says it has about 1.8 million paying active accounts for this one game and 800,000 simultaneous users in March of this year. It also offers other games and more on the way, which the $120 million will help, I’m sure. Sohu still owns and controls a majority of the company.
Maybe the tweet from Changyou is: I’ve got game and a business…hey, and also publicly traded stock.