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MySpace Co-Founder Brett Brewer
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Twitter will find it tough to justify its recent $1billion valuation and hard to make a lot of money, according to MySpace co-founder Brett Brewer.
Brewer, founder of Intermix Media, the company which created MySpace and was acquired by News Corporation in 2005, said Twitter will now be strongly focused on how to monetise the microblogging service, how to integrate ads, and how to cope with Facebook. Last week Twitter closed a round of financing of around $100 million that valued the social media network at $1billion.
He said: “Assuming that Facebook doesn’t squash Twitter, for want of a better term, I honestly think Twitter is going to have a hard time making a lot of money, certainly from advertising, at least to justify a billion dollar valuation. Now can they come up with other angles were people can pay money? Possibly, but it’ll be tough to justify that valuation.
“Clearly they are in a super-exciting place, they are a market leader, though it is a little bit of a niche. Honestly, if I was Twitter I’d be pretty concerned about Facebook and the products that Facebook is already launching and is going to launch that are going to make it even more Twitter like. If you could parachute into a Twitter board meeting I have a feeling their main concern would be Facebook.”
In his speech to Aegis’ clients in Sydney this morning, Brewer cited examples of social media campaigns that had worked successfully through using engagement with the audience like Coca-Cola and Dell, rather than traditional banner ads. However, he questioned how Twitter could replicate the attempts of Facebook and MySpace to integrate interactive ads into their sites.
“Twitter is going to try to do whatever they can on the advertiser side but because it’s a different channel and such a unique format, they don’t have quite the flexibility that Facebook or MySpace has on the ads or on the creative,” he said.
But Twitter could still pose a threat to Google, Brewer claimed, due to its real-time search capability. Google has already tried to “aggressively” acquire Twitter, he said. “Over time if that Twitter search information proves to be more valuable and more real time than what you can search on Google they could potentially for the first time start losing search share to Twitter.”
Across all social media sites, Brewer talked up the importance of “bottom up marketing” for advertisers, or in other words, giving consumers some control over how they interact with a brand: “Top down branding will continue to experience growing impotence. Influencer marketing will go mainstream. We’ll see more and more of this concept of bottom up marketing, getting very passionate product fans out there and giving them the tools to spread the word. The underlying philosophy of the web is, and will continue to be, more and more social.”
