Twitter’s financials for server costs have never made sense - the amount of money required to serve the sheer volume of engagement can’t possibly have been resolved by ads that Elon is somehow refusing to keep tapping into.
I’d wager that some other interested party engaged in some type of private-public partnership was floating costs for (let’s call it “privileged”) access to the backend of Twitter – granting a bottomless pit of funding to keep the platform running no matter the cost.
Once Twitter left the hands of someone deemed trustworthy, that life support doesn’t stick around – leaving Twitter facing complete insolvency by October of this year unless Musk literally does whatever he can to reduce engagement to save on costs.
Twitter loses more money when it has more engagement. If you have 100k users and add a new one, every interaction that additional user makes with tweets viewed by those 100k existing users requires 100k updates pushed to those 100k users’ pages. Every like sends a ln update of +1 like on the tweet to every one of the 100k users. It becomes significantly more expensive per user engagement.
The ads being seen by additional users don’t cover that constantly-compounding cost to keep engagements up to date across the platform. Musk isn’t being honest about the reasoning (web scraping issues my ass) and is scrambling to buy desperately-needed to keep the platform up past October.
I think this goes to show just how impossible a business model like Twitter’s was from the jump and shines a light on the absurdity of it being self-sustaining without a massive source of reliable external funding.
The past 15 years of growth in anything technology adjacent has been fueled by one thing: Extremely cheap debt. Interest rates have at been rock bottom since the 2008 crisis, and they’ve only started to tick up recently. That means the ability to fund infinite growth for basically nothing, so tech companies have relied heavily on debt financing.
Now though, that’s no longer viable. Silicon Valley Bank was very heavily involved with all these tech companies, and it went insolvent in March largely because of rising interest rates. They held a lot of long term bonds at low interest rates. In normal conditions, rising interest rates mean lower bond prices and unrealized losses, but not a major problem because they can just hold them to maturity and never realize the loss. Bank runs forced SVB to sell the bonds for huge losses though, turning unrealized losses into realized losses, and a non-issue into a major problem.
Now that cheap debt is gone, these tech companies are desperately scrambling to attain profitability. It hasn’t been discussed much, but this is a big reason for the changes at both Twitter and Reddit.
Simple. Jews owned all the funding sources, regulatory agencies that were supposed to watch for this, industry-insiders that could have blown a whistle and the media companies that could have investigated. Anyone who could possibly threaten this structure is blasted by the space lasers.
every interaction that additional user makes with tweets viewed by those 100k existing users requires 100k updates pushed to those 100k users’ pages. Every like sends an update of +1 like on the tweet to every one of the 100k users. It becomes significantly more expensive per user engagement.
This is not how a reasonable API works and is probably not how Twitter “pages” work. A “+1” just changes a number in a database from, say, 629644 to 629645. The latter is no more expensive to send over the wire to a client when it requests data.
At the risk of sounding tin-foily…
Twitter’s financials for server costs have never made sense - the amount of money required to serve the sheer volume of engagement can’t possibly have been resolved by ads that Elon is somehow refusing to keep tapping into.
I’d wager that some other interested party engaged in some type of private-public partnership was floating costs for (let’s call it “privileged”) access to the backend of Twitter – granting a bottomless pit of funding to keep the platform running no matter the cost.
Once Twitter left the hands of someone deemed trustworthy, that life support doesn’t stick around – leaving Twitter facing complete insolvency by October of this year unless Musk literally does whatever he can to reduce engagement to save on costs.
Twitter loses more money when it has more engagement. If you have 100k users and add a new one, every interaction that additional user makes with tweets viewed by those 100k existing users requires 100k updates pushed to those 100k users’ pages. Every like sends a ln update of +1 like on the tweet to every one of the 100k users. It becomes significantly more expensive per user engagement.
The ads being seen by additional users don’t cover that constantly-compounding cost to keep engagements up to date across the platform. Musk isn’t being honest about the reasoning (web scraping issues my ass) and is scrambling to buy desperately-needed to keep the platform up past October.
I think this goes to show just how impossible a business model like Twitter’s was from the jump and shines a light on the absurdity of it being self-sustaining without a massive source of reliable external funding.
The past 15 years of growth in anything technology adjacent has been fueled by one thing: Extremely cheap debt. Interest rates have at been rock bottom since the 2008 crisis, and they’ve only started to tick up recently. That means the ability to fund infinite growth for basically nothing, so tech companies have relied heavily on debt financing.
Now though, that’s no longer viable. Silicon Valley Bank was very heavily involved with all these tech companies, and it went insolvent in March largely because of rising interest rates. They held a lot of long term bonds at low interest rates. In normal conditions, rising interest rates mean lower bond prices and unrealized losses, but not a major problem because they can just hold them to maturity and never realize the loss. Bank runs forced SVB to sell the bonds for huge losses though, turning unrealized losses into realized losses, and a non-issue into a major problem.
Now that cheap debt is gone, these tech companies are desperately scrambling to attain profitability. It hasn’t been discussed much, but this is a big reason for the changes at both Twitter and Reddit.
Additionally, even YouTube is trying to enforce ads more strongly and gyfcat is closing down.
People are looking for conspiracies, I like them too, but this was just a bubble waiting to burst.
It will be interesting to see what will come after.
Not to mention it lined up perfectly with the start of the new fiscal year on July 1st. Hard to believe that is just a coincidence.
They were previously publicly traded were they not? How do you figure that backend funding worked if it wasn’t shown on the balance sheet?
Simple. Jews owned all the funding sources, regulatory agencies that were supposed to watch for this, industry-insiders that could have blown a whistle and the media companies that could have investigated. Anyone who could possibly threaten this structure is blasted by the space lasers.
Obviously.
I am fairly certain that “obviously” is your sarcasm tag, but I work with people this stupid/racist which makes me a little sad.
This is not how a reasonable API works and is probably not how Twitter “pages” work. A “+1” just changes a number in a database from, say, 629644 to 629645. The latter is no more expensive to send over the wire to a client when it requests data.
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