"We have developed a global platform for self-expression and conversation in real time, and the market for our products and services is relatively new and may not develop as expected, if at all," Twitter cautioned potential investors in its IPO filing. Basically, Twitter has no idea if Twitter will be a successful business. The company detailed substantial risks in its business model, any of which could threaten the future of Twitter. Loss of users, loss of advertising revenue, increased competition from other social networks, problems accessing the network on a mobile OS or desktop Web browser, and international Internet disruptions are just a few of the dangers that could topple Twitter. The list goes on.
Google is fickle
Twitter said it relies on Google search results to push traffic to its site, but Google these days is promoting its own social network, Google+. Twitter said the change has "negatively impacted the organic search ranking of our webpages." Google clearly has the upper hand in this situation.
Spam could ruin Twitter
Twitter knows that spam is a huge problem that annoys users and makes the Twitter experience less appealing overall. The company said that the time spent policing spam on the network diverts "significant time and focus of our engineering team from improving our products and services." The more time Twitter devotes to spam prevention, the less time it can spend on making Twitter better. That's not good.
Ads are very profitable
Social networks have risked the wrath of users to start showing ads, but those ads are paying off. Twitter reported that 87 percent of its revenue for the first six months of the year came from ads, primarily through promoted tweets, accounts, and trends. But none of Twitter's ad clients have long-term contracts, and if those brands move on to the Next Big Thing, Twitter could crash and burn.
Evan Williams is about to be richer
Evan Williams, Jack Dorsey, and Biz Stone founded Twitter in 2006, but didn't stick around as executives to grow the company into the influential business it is today. Maybe Williams had a premonition of Twitter's future success. He held on to his 12 percent stake in the company—the largest individual stake, actually—and will rake in billions from the IPO when all is said and done.
Twitter's public conversations are truly public
I bet Mario Batali and Gavin Rossdale had no idea their discussion of tomatoes and basil would land in some seriously important financial documents. But that's Twitter for you: Anything goes and (most) everything is public.
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