5 Reasons Why Twitter's IPO Will Only Hurt Everyone

Twitter's initial public offering is now imminent. Here are five reasons why it's only going to hurt users, developers, and shareholders.

 

 

Twitter just announced that it will file its initial public offering for stocks with the SEC today.  The social media company is going the IPO route after investors were caught salivating over the likely value of the company, which is currently $11 billion.  This is despite having pretty low revenues.  However, this is not welcome news for Twitter users.  With Twitter likely to shift to catering to shareholder whims once the stock is launched, there are a few things that will likely change, to the harm of Twitter users, developers, even shareholders everywhere.

1.  More Ads.  Always

Twitter will need a constant source of revenue to placate shareholders.  While the current “promoted Tweets” strategy is working, shareholders will likely ask for more.  Thus, expect advertising and promotional tweets to become far more invasive and harder to get rid of for Twitter users.

2.  Giving Up User Privacy…

If Facebook’s new ad practices are of any indication, Twitter will likely need to show that its userbase is a valuable, and a source of revenue.  The company will likely begin tracking tweets for keywords, and begin analyzing user behavior for targeted ads, at the cost of users’ privacy.  Whatever method of tracking this information Twitter uses will also likely be available to advertisers and other greedy elements for a fee.

3.  ...And Personal Media For Cash.

Another of Facebook's new practices involves the selling of personal data.  While Twitter lacks Facebook's depth in personal data mining, the company can still be as unscrupulous by mining Twitter pictures and Vine videos to sell to third-parties for use in their own advertising.  This has some unfortunate implications.

4.  Developers Being Charged To Work With The API

It is uncertain whether Twitter will stick to its current standing and offer its API, which allows developers to create programs for use on Twitter, free of charge.  However, the incentive to license use of the API for a fee may be too strong for Twitter to resist, which may result in developers being pushed out of using Twitter due to the cost.  This could set things back.

5.  No Transparency

Thanks to the JOBS (Jumpstart Our Business Startups) Act, Twitter confidentially filed their IPO.  This is particularly bad for investors, especially because nobody is certain how Twitter is actually earning money and creating revenue.  Without public scrutiny, there is a chance the stock will crash and burn, like it has with coupon site Groupon, or the IPO will be overvalued, like Facebook's IPO was in 2012.  By denying the public transparency on how Twitter makes money, there is a risk that people will be taken in for a scam.

 

 

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