Tuesday, November 5, 2013

Naysayers half empty take on Twitter IPO

Naysayers' guide to this week's $2B Twitter IPO



Twitter CEO Dick Costolo, left, and CFO Mike Gupta, are seen after meeting with potential investors last week in Philadelphia. The San Francisco-based company is facing many questions about its future as it prepares for its expected New York Stock Exchange debut on Thursday.
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Bloomberg/Jim Graham
Twitter CEO Dick Costolo, left, and CFO Mike Gupta, are seen after meeting with potential investors last week in Philadelphia. The San Francisco-based company is facing many questions about its future as it prepares for its expected New York Stock Exchange debut on Thursday.
Senior Technology Reporter- Silicon Valley Business Journal
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As Twitter gets set for a newly upgraded IPO this week, some analysts are waving caution flags and pointing out that its future success is far from assured.
Trip Chowdry, a managing director at Global Equities Research, and others are raising questions and drawing uncomfortable analogies to the dot-com tech bubble as the San Francisco micro blogging service heads towards an expected New York Stock Exchange debut on Thursday.
Chowdry told Benziga last week that Twitter's IPO filings, the latest of which was posted on Monday, have been "more about propaganda rather than giving insight."
While other analysts, such as Morningstar's Rick Summers, believe Twitter will grow into a major social media money maker, Chowdry raises doubts.
People are spending more time on Twitter alternatives such as SnapChat, WhatsApp, Skype IM and Apple iMessage, he says.
Twitter is also facing increased competition in the "celebrity" space that helped to make it so successful. It retains dominance with entertainment stars but trails in the realm of professional celebrities who write as LinkedIn Influencers, tech stars who blog on Google+ and fashion and design trendsetters who post images to Pinterest.
That last example points to another big hole that Twitter is trying to plug — visual networking. Pictures have propelled the social stickyness of services like Pinterest, Facebook's Instagram and Yahoo's Tumblr.
Twitter revamped its page feeds to make them more visual last month but Chowdry says this brings up another challenge.
Chowdry told another publication, PhysOrg, that Twitter "will need to spend a huge amount of money investing in data centers to catch up with the visual aspects of the social networks to remain competitive with Google, Facebook and Yahoo."
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Cromwell Schubarth is the Senior Technology Reporter at the Business Journal. His phone number is 408.299.1823.

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