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Tuesday, October 25, 2016

The cost of corporate convergence

Money-losing Twitter is cutting jobs. What will be interesting is if all of the Trust and Safety Council member and other SJWs still have jobs after the job cuts.
Twitter Inc. is planning widespread job cuts, to be announced as soon as this week, according to people familiar with the matter. The company may cut about 8 percent of the workforce, or about 300 people, the same percentage it did last year when co-founder Jack Dorsey took over as chief executive officer, the people said. Planning for the cuts is still fluid and the number could change, they added. 
It's always easy to see the extent to which a corporation is converged when it engages in layoffs. If engineers and salespeople are let go while diversity hires and HR personnel remain employed, the convergence is complete.

The success of Gab, accomplished on a shoe string, can't be helping the Twitter cause any. Where is the value in a money-losing company with such demonstrably low barriers to entry? Particularly when that company is converged and prone to attacking its customers.

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57 Comments:

Blogger Basil Makedon October 25, 2016 8:04 AM  

Interesting indeed. I have read other articles stating that Twitter has some fifty to hundred years of operating expenses in cash, however.

http://www.usatoday.com/story/money/markets/2016/01/25/twitter-has-412-years-fix-itself/79301680/

Anonymous VFM #6306 October 25, 2016 8:26 AM  

So maybe Twitter's an upperclass teenage girl and a cutter. She's just slashing jobs for the attention.

Or maybe twitter has the cash to run gab for fifty more years, but exists to feed a far less lean master...

Blogger James Dixon October 25, 2016 8:31 AM  

> Twitter has some fifty to hundred years of operating expenses in cash, however.

Operating expenses probably don't include the CEO and board member salaries.

Blogger Johnny October 25, 2016 8:31 AM  

@1
Interesting indeed. I have read other articles stating that Twitter has some fifty to hundred years of operating expenses in cash, however.

"The company ended its most recently reported quarter with $3.5 billion in cash and investments, says S&P Capital IQ. If the company only burns $8.5 million a year in free cash — as it did the past 12 months —


I find the above numbers mysterious. Free cash?

Twitter has gross revenue over two billion a year and has been losing around five hundred million a year. About one fourth of their gross revenue turns up as a loss. If they also start getting increased competition, as apparently they are, increased losses would be unsurprised. Not the sort of thing a value oriented investor would put money in.

Blogger Jamie-R October 25, 2016 8:35 AM  

Vox, you gonna bother getting your Twitter going again or you just gonna leave it? Sure you can say gay niggers all day at Gab, I haven't really stretched my legs on how many gay niggers I want to incorporate in my daily speech, man there's so many gay niggers...... BUT, there's been a few times I was gonna tweet you something then I was like "oh yeah he's smashed the window next to the naughty corner & is playing soccer with gay cunts"

Blogger Lobo Util October 25, 2016 8:39 AM  

Remember the end-game.

Everyone wants to get out with oodles of money. All the investors, all the executives, all the workers want to make obscene amounts of money when they cash out.

With their market looking severely curtailed, their customers threatened by Gab and Facebook, and no profit, no one will pay kerbillions of dollars for them. Their end-game was destroyed.

The only other possible end-game is to break even and hope someone pays outrageously for their name and advertising potential.

Well, there is one other. Become a utility and make a nice steady long-term profit. Unfortunately everyone who looks at them knows that Twitter will be abandoned when a better alternative like Gab comes up.

Blogger Basil Makedon October 25, 2016 8:40 AM  

Oh, I would never invest in Twitter. I try to only invest in companies that make/design what they sell. Twitter manages what they sell -- the content of others. That means they are completely vulnerable to the product turning into garbage or moving elsewhere. Exxon doesn't have that particular problem.

Let me clarify -- I don't think that Twitter really has effectively indefinite cash to operate. No company has that. Just showing that there is a glitch in the Matrix here. This is why VD's link is interesting to me.

Their actions -- VD's link that they are cutting jobs -- demonstrate that there is a problem.

Blogger Harsh October 25, 2016 8:45 AM  

They aren't losing their jobs. They're just becoming employment-fluid.

Anonymous krymneth October 25, 2016 8:53 AM  

Twitter was, at the time, legitimately technically challenging to make. In 2008, computing power was noticably more expensive, web technologies noticeably more immature, a lot of storage and communication technologies we now take for granted in the "cloud" didn't exist yet. Web development by 2008 when it was founded wasn't too difficult for more conventional request/response systems, but the whole streaming thing was cutting edge. And getting SMS working, which feasible, was a lot of work.

Today, with all the free tech and readily-available cloud services, while bringing up a Twitter is still nowhere near trivial, it is fairly trivial to bring up something like Gab that scales up to at least a few hundred thousand people, using commodity cloud services and free technologies. Replicating Twitter's scale itself would still be substantial work, but certainly less than what Twitter itself had to do.

Facebook would be more challenging, because there's both more depth and breadth to their offering, but between figuring out the core feature set you need and trimming the rest and the aforementioned technology advantages over what Facebook itself had to implement, it would still be feasible for a smaller team. But I'd probably want at least 20-30 good-to-great people to get it done in a reasonable time frame; Gab, I believe, is much smaller than that, because they can be.

Blogger Timmy3 October 25, 2016 8:57 AM  

Twitter would be the company Peter Thiel can buyout, take private, and made profitable. It's liberal patrons already abandoned it. Let it further deteriorate and offer pennies on the dollar.

Blogger swiftfoxmark2 October 25, 2016 9:05 AM  

What I am wondering is why so many people were needed to run Twitter in the first place.

I get a sense that you wouldn't need more than a few dozen people to keep it going with the occasional contracting to make improvements to the website.

Blogger Shimshon October 25, 2016 9:22 AM  

8% doesn't even qualify as a good start.

Blogger lowercaseb October 25, 2016 9:24 AM  

If they wanted to save money, they'd lose the obnoxious expensive building in SF...but I think there is a poison pill with the city where they would have to pay back the city payroll taxes they are getting a break for. So instead they will cut the folks who actually do work there instead while Jack cuts out early to catch his hot yoga class.

Blogger Were-Puppy October 25, 2016 9:26 AM  

Very good pointing out the Twitter Trust and Safety Council. I believe it was early this year they announced it, and it hasn't taken a full year to start wrecking what was left of Twitter.

I put a ton of links about this in here a while back

http://sjwlist.com/Category:Twitter

Blogger Mr.MantraMan October 25, 2016 9:29 AM  

In a society where "isms" and phobias are the measuring stick which whites must be judged while no one else is judged by any such measuring stick then yeah typing "nigger" while not useful for much has to be overlooked as the cost of freedom.

Blame the Left, blame their implementation of cultural marxism, blame the Frankfurt School.

PS if any other race was subjected to the Frankfurt School's methodology they would have committed mass suicide by now, count yourself lucky troll.

Blogger JACIII October 25, 2016 9:32 AM  

Swiftfox - it takes so many people because the content must be policed. HR must exist.

Anonymous 5343 Kinds of Deplorable October 25, 2016 9:34 AM  

A place to yell "nigger" and not be judged negatively.

Ah, some people will still judge you negatively, and that's fine. They're entitled to their opinion too, including the expression thereof.

The difference is, fewer of your fellow Gab users would try to get you disemployed for holding an unpopular opinion.

Blogger Harsh October 25, 2016 9:39 AM  

This comment has been removed by the author.

Blogger Jamie-R October 25, 2016 9:40 AM  

gay niggers building white houses in rainbows, that's all I care about.

A wild kike-blowing faggot appears! Using term racist reveals who you are and is an irrelevant word to scream at Anglos who don't care anymore. Of course they won't stop so stopping caring morphs into Spain, Russia & the 1938 that Spielberg cries about 60 years later. Go figure. But then we get to play Hide History until the same interference & agitation against normality happens. Go figure again.

Anonymous Jordi October 25, 2016 9:47 AM  

This famous graph sums it all

https://quantumpranx.files.wordpress.com/2011/05/chsmith-cyclebureaucracy.png

Blogger Student in Blue October 25, 2016 9:50 AM  

Freedom of expression means nothing if Freedom of response isn't attached to it.

And what happens when your "Freedom of response" impinges on someone else's freedom of expression?

Is it then "freedom of expression only for people I like and agree with"?

Anonymous Full-Fledged Fiasco October 25, 2016 9:54 AM  

This is why you should never name your child "Trent".

Anonymous TJK October 25, 2016 9:57 AM  

It has been my understanding that Twitter's customers are advertising agencies and companies interested in data mining. Users are just assets.

Or is Twitter daft enough to attack those companies too now?

Anonymous Jeff Rollins October 25, 2016 10:01 AM  

Twitter is losing money because they wont police the right wing trolls.

Once they start banning people like Steve Sailer they will become more profitable

Blogger Jamie-R October 25, 2016 10:01 AM  

You think history would help some see that they constantly lose battles after they've done enough damage for others to see what is happening and what will happen if it keeps going.

Nope, they do it again.

Like, a farm in the mountains with some horses and not bothering no one might actually work.

Nope, they do it again.

Blogger Matthew October 25, 2016 10:06 AM  

Full-Fledged Fiasco wrote:This is why you should never name your child "Trent".

Or Tad.

Blogger Student in Blue October 25, 2016 10:08 AM  

@26. Trent Johnson
And how exactly would that happen, absent illegal activities like assault, etc. How does advocating for someone's firing or demotion impact any right to expression.

Try to imagine someone trying to get you fired by any means, any time you said something about... oh, let's say how you don't like how the park looks. So you post on Twitter how it's a shame the local park has let itself go, with an accompanying picture.

Suddenly your boss gets a call, and is told that you've been beating women, you're probably a rapist, and you want to kill gays and blacks. Now you don't have a job, and you'll probably never get a job. Women go to the other streets to avoid you, strangers give you the evil eye, and your name and reputation is lower than mud.

You could continue to talk freely that the local park is in disrepair, but your life is ruined, and no one takes you seriously. And due to the fake allegations, there's a good chance of incarceration for even just a little bit.

Defamation impinges on freedom of expression. Imprisonment from false charges impinges on freedom of expression.

And "trying to get you fired by any means" is not an exaggeration when reviewing SJW behavior.

Blogger Student in Blue October 25, 2016 10:16 AM  

And before he tries saying "b-b-but I said nothing illegal!", in which case there's absolutely no difference between this made up crap of "freedom of response" and "freedom of expression", so trying to differentiate the two is stupid.

To be fair, and this was my mistake, what it would be impinging on would be the overall unalienable right to life, liberty, and the pursuit of happiness.

Blogger VD October 25, 2016 10:27 AM  

You're banned and spammed, Trent Johnson.

When will the rest of you learn not to touch the fucking poop?

Blogger Jamie-R October 25, 2016 10:28 AM  

There's no such thing as bleeding people into silence. History shows it doesn't work. The American Change agents that see shaping pop-culture as consent are about to find out in the 21st Century. We'll know more how far along it is in 2 weeks time.

Anonymous SitDogDilly October 25, 2016 10:31 AM  

"You're banned and spammed, Trent Johnson.

When will the rest of you learn not to touch the fucking poop?"

This reminds me of the dimwit HR Administrator who tries to fire a subordinate who turns out to be much much smarter than them....because they are much much smarter than them.

Blogger Jamie-R October 25, 2016 10:31 AM  

I came along to ask a question. But then I wanted to roll around in cheeto dust and throw things out there.

Blogger James Dixon October 25, 2016 10:34 AM  

> More importantly, what you describe is hogwash. It doesn't happen.

Besides it your wet dreams? Yeah, unfortunately it does.

Blogger Rusty Fife October 25, 2016 10:41 AM  

@34

Caddyshack reprise

DOODY!

Blogger Al From Bay Shore October 25, 2016 10:42 AM  

This comment has been removed by the author.

Blogger Al From Bay Shore October 25, 2016 10:44 AM  

@29 You're right. For some, there is an irresistible and uncontrollable urge to look at the poop and say "Hey, that's poop!".

Anonymous BGKB October 25, 2016 10:46 AM  

Even broken calendar comes close once a year. https://www.lewrockwell.com/political-theatre/michael-moore-thinks-trump-will-win/

While trashing rednecks using the vote to say FU to the establishment. While accidently praising TRUMP's actions in Detroit.

Blogger Student in Blue October 25, 2016 10:48 AM  

When will the rest of you learn not to touch the fucking poop?

Apologies. My Tadmeter is broken, and I didn't suspect.

Blogger Rusty Fife October 25, 2016 10:49 AM  

Al From Bay Shore wrote:@29 You're right. For some, there is an irresistible and uncontrollable urge to look at the poop and say "Hey, that's poop!".

Worse, they feel compelled to touch, smell, and taste it before declaring "it's poop, good thing I didn't step in it".

Blogger Rusty Fife October 25, 2016 10:53 AM  

OT. Boy, this voting line is long

Blogger Al From Bay Shore October 25, 2016 10:55 AM  

@40 LOL

Blogger FrankNorman October 25, 2016 11:15 AM  

What exactly is Twitter's business model anyway? Just advertising?

At the moment, I find it useful simply because of how many people are using it - in some cases, an almost-realtime view of things one would learn about only in processed form in the media.

Anonymous a deplorable rubberducky October 25, 2016 11:16 AM  

Twitter has decided to roll out its next earnings report at 4:00 AM PST, on Thursday morning. 4:00 AM?? They will claim that they simple want to up pro-active and accommodate the East Coast Wall St. time. But this is pretty unusual, normally Silicon Valley companies report at 1:00 PM PST at close of market.

This may be signal that they are in "brace for impact" mode over there at Twitter HQ!

https://techcrunch.com/2016/10/24/twitter-decides-to-release-earnings-while-most-of-us-are-sleeping-because-reasons/

Blogger JACIII October 25, 2016 12:22 PM  

Swiftfox - it takes so many people because the content must be policed. HR must exist.

Blogger Derek Kite October 25, 2016 12:25 PM  

In a converged country the solution to this is to get government money. An essential means of communication. You end up with the BBC or CBC or NPR.

Bet on it if Hillary wins.

Anonymous Shut up rabbit October 25, 2016 12:42 PM  

swiftfoxmark2 wrote:What I am wondering is why so many people were needed to run Twitter in the first place.

They employ an army of SJWs to patrol the tweets for bad think. Even if they get minimum wage it's making them hemorrhage a fortune.

I have to make a new account every couple of weeks as just RT-ing anti-mooslim tweets will eventually get you shut down. The reasons are so random I really don't think it automated. There is no consistency that one would expect with a program but it has the exact same feeling as seeing that shit-eating grin SJWs have when they ignore all reason and evidence.

Gab is great an' all but the real pleasure on twitter is mocking the retarded SJWs who live there.

Anonymous Bz October 25, 2016 1:03 PM  

If anyone here is an investor, it might be interesting to ask @jack at the call about their policies for quietly and deliberately destroying the user experience for certain users, even hugely popular ones. This makes no sense in the real world. Dorsey has had his shot and might as well move on.

That said, it's a pretty ubiquitous service and I think Twitter would be a useful media property for someone like the Qatar Sovereign Wealth Fund, right next to Al-Jazeera. Or perhaps Carlos Slim would find it strategic? Rupert Murdoch? There are plenty of players who wouldn't mind buying a media megaphone in the US, so it's unlikely that Twitter goes down in flames. (It would require epic mismanagement to drive it into the ground, but that happens.)

Blogger weka October 25, 2016 2:53 PM  

Jack, if he has any sense at all, has quietly removed sufficient cash for him to live in the style he is accustomed to for his expected life time.

(Which is not that long, Gays generally die a decade or so early).

He is now using Twitter to virtue signal, so he remains a member in good standing of the Silicon Valley Convergence.

He does not care that the replacement, which will come, will be beased somewhere that does not let US justice officials near servers.

Anonymous BGKB October 25, 2016 3:21 PM  

(Which is not that long, Gays generally die a decade or so early).

The only thing most gays have in common with the founding fathers is average life expectancy

Blogger Thucydides October 25, 2016 3:55 PM  

So when exactly is FaceBook going to face "AltBook" as part of the great Fork?

FaceBook is perhaps the most explicitly evil of the converged social media platforms and needs to be treated to "Direct Action" rather than a death of a thousand cuts as millions of consumers quietly drift away.

Blogger Snidely Whiplash October 25, 2016 4:17 PM  

Bz wrote:(It would require epic mismanagement to drive it into the ground, but that happens.)
last year, Twitter lost $500MM on $2BB in revenue.
If 300 people is 8% of their workforce, that means they are paying 7500 people or so.

For what they offer, does that even make sense? Maybe 2 dozen people to run the infrastructure, Maybe another couple dozen to do programming. Be generous and give the sales department 1000 people for sales, marketing and data analysis.
They essentially have no support department at all.

Where the hell do you hide the other 5-6000 people? What do they do? Certainly nothing to help the company.

Blogger Snidely Whiplash October 25, 2016 4:25 PM  

Bad math. Bad bad math!
make that 3600 total employees, not 7500. more sane but still not anywhere near where they need to be.
Since virtually all of their expense is personnel, they need to cut back at least 25% in payroll to break even.

Blogger Ingot9455 October 25, 2016 4:37 PM  

As I mentioned, Twitter has an extremely big footprint at a high-end co-location facility for something like a messaging and advertising service.

Think like the gross inefficiency of Wikipedia where they just threw hardware at stuff instead of figuring out how to do it right like Infogalactic.

They are not running lean and mean and they do not have a hundred years of burn rate in cash sitting around. The USA Today link says 'cash and investments' which probably means hardware and assets. Computer hardware can last a little longer now than it used to, but in 3 years all those machines in the racks can be had for fire sale prices.

Blogger Bill October 25, 2016 4:49 PM  

On a related note... the female AG that forced out Frank Fina over some x-rated e-mails the guys in his office were passing around;
http://www.philly.com/philly/news/politics/20160608_Fina__prosecutor_ensnared_in_Porngate__leaves_Phila__D_A__s_Office.html

Was just sentenced to 2 years in prison for politically motivated leaks in the case.

http://townhall.com/tipsheet/mattvespa/2016/10/25/disgraced-ag-kathleen-kane-slapped-with-1023-month-jail-sentence-for-politicallymotivated-grand-jury-disclosures-perjury-n2236474

Anonymous Anonymous October 25, 2016 5:06 PM  

It's the sales guys getting it, just like you said.

https://techcrunch.com/2016/10/24/twitters-sales-team-may-take-a-hit-in-big-upcoming-layoffs/


Anonymous Bz October 25, 2016 5:33 PM  

According to Twitter, they had 3860 employees in June, with 40% in technical roles (which would be 1540).

They have 313M monthly active users. Even so, I think they could get by with a lot fewer people. How many people does it take to run Instagram, for example? That seems to be basically the same thing from a technical standpoint. (Apologies if I'm oversimplifying.)

I see that at beginning of 2011, Twitter had about 400 employees, then grew to 3500 in roughly 24 months. So it's quite possible they've overhired. In the end, it depends on the service growth.

Anonymous Bz October 25, 2016 5:43 PM  

Twitter appeared in 2015 to have $1.31B in "property plant & equipment" and about 1/3 of that, $579M, as depreciation. That looks like they write off their equipment over 3 years. (I'm not an accountant, so take that for what it's worth.)

They also seem to lose about $500M per year after their IPO, with a cumulative loss of $2.6B in 2015.

http://amigobulls.com/stocks/TWTR/balance-sheet/annual

Looking in their annual report, annoying users are referred to as 'spammers'. "“Spam” on Twitter refers to a range of abusive activities that are prohibited by our terms of service and is generally defined as unsolicited, repeated actions that negatively impact other users with the general goal of drawing user attention
to a given account, site, product or idea."
(p.20)

I wonder how consistently those guidelines are applied?

One can also see on which pyres they burn their R&D cash, and what they see as risks.

http://files.shareholder.com/downloads/AMDA-2F526X/0x0x821792/AB7B5D27-2CEB-468B-9C9B-469676E3186A/876564_Twitter_Annual_Report.pdf

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