Should Twitter sell off as they face "dump pipe" scenario?
Twitter is in danger of becoming a "dump pipe", meaning it is now a platform where other companies are able to get value from it&nbsp;while Twitter itself extracts little additional revenue. Twitter has&nbsp;not&nbsp;evolved its&nbsp;site like Facebook and other social media&nbsp;channels&nbsp;have, leaving Twitter with little ad revenue opportunities. Twitter started in 2013 as a 'mobile first' service, yet since then it&nbsp;has failed to develop any products internally, unlike&nbsp;rival Facebook who has acquired Instagram, WhatsApp and Oculus to advance their mobile offering. Victor Basta, Managing partner at Magister Advisor,&nbsp;speculates that with Twitter's share price falling 25%&nbsp;below its IPO price, and valued at $17bn it could become an acquisition target for Facebook and Google. &nbsp;&nbsp;&nbsp;
Billions have been made in Silicon Valley by wrapping HTML angle brackets around 1980s protocols and calling it “innovation”.

IRC became instant message, email became Facebook, and SMS became WhatsApp and Twitter. But the latter, having failed to add anything interesting for years, should cut its losses and find a buyer.

So says boutique tech banking advisor Victor Basta in a scathing note. Basta thinks Twitter has been so inept it does not deserve the kind of high market valuation that “platform” companies are awarded, and is destined to become a “dumb pipe”. Therefore, the best option is to sell.

You could say Mandy Rice-Davies applies, since Basta’s outfit specialises in selling tech companies, so he could simply be touting for business. Then again, many stock watchers share his sentiment. Twitter’s cred plummeted after its last earnings, which revealed stagnant numbers and an 8 per cent quarterly increase in revenue. It continues to pay out huge numbers in stock compensation.

Given that Twitter is ideally suited for mobile (it is just a rudimentary mobile messaging app shaded in pastel colours), it is surprising that it’s squandered its opportunity.

“Alone among internet ‘majors’, Twitter has squandered its lead by failing to innovate, failing to drive engagement and consequently ceding the lucrative mobile ad revenue land grab to Facebook and Google. Whereas Twitter should be grabbing a big percentage of new mobile ad spend, the opposite is true; we see 75 per cent of that spend going to Facebook and Google, who weren’t even mobile-first businesses but have passed Twitter in the past two years,” thinks Basta. It makes no attempt to segment or personalise the “firehose”, he adds.

Twitter’s previous CEO gloated about the success of Periscope, which allowed users to pirate live TV streams. That’s hardly helped its credibility as a grown-up platform partner to stream lucrative events.

As we pointed out at Twitter’s IPO in 2012, Twitter’s management themselves don’t seem to realise why people like and use Twitter. ®