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Twitter Bear Case Scenario for Profitabilty $TWTR, $FB, $SOCL, $YHOO, $GOOG

Twitter has yet to become a blue chip dividend paying stock. Everyone wants to see how the whole monetization thing is coming along. Here are a few observations that maybe Twitter has not considered.

How many accounts become inactive i.e. they do not post a twit for thirty days or more. As a user of twitter I am amazed as to how many accounts go inactive yet have built up followership’s of thousands of individuals.

Most advertising and marketing types will agree that there are a few industries which have big spends. Generally they are Travel, Automotive, Real Estate, Financial Services, Consumer Electronics including computers tablets and smart phones. Cyclically politicians in western liberal democracies will spend inordinate amounts on advertising. Traditional media has long recognized and embraced the election cycle spend. Many local rags survive because of it. Where is Twitter in these businesses? It’s all about “show me the money”

There is an entire sub-culture on Twitter offering to sell you thousands of followers. Not a word about basic demographics. You think a wine merchant in Manhattan  needs a different followership from the go-kart operator in Southern California. Twitter is not in control of its product and wild-eyed cowboys abound.

Then what about the large power users. Lady GaGa, Jimmy Fallon, Big Name Politicians, Large corporations and big brands are all learning how to use Twitter. When does twitter start charging a toll or some rent?

It’s not about the engineering which of course needs to work. It’s going to be about the money. Which of course will be based in the Western World and in China and maybe India and Brazil one day.

George Gutowski writes from a caveat emptor perspective.

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