[cletus]

> 8. Venture capital blues: Expect both fundraising and investing to remain flat. While some firms will thrive, there's still an ongoing shakeout in this industry as the number of partners will continue to dwindle and returns will remain poor.

Huh? Is he in the same economy as me? Or is he deliberately excluding angel and other forms of seed I vesting, which are becoming an ever-increasing source of venture funding?

The big story here is that on the VC side there is a supply problem: meaning companies need less money. Valuations are going up as the money in the system competes for deals. An awful lot of companies can get profitable or acquired on seed investing alone.

As for Bartz going, it should happen and he's right why: she can't articulate what Yahoo is about.

Google buying Twitter? I doubt it. Not because Google doesn't want it but because Evan Williams has already sold Blogger to Google so a) he doesn't need the money and b) it didn't go that great. Twitter is hitting for the fences.

I can't see Facebook hitting 1 billion users this year. Facebook has the best of problems: it's running out of people to add to its service.

Tech IPOs: because of Sarbanes-Oxley and other factors the tech IPO in the US is basically dead except for the very biggest of companies. He contends none of these will IPO this year. I tend to agree. Typically you have 6+ months warning (through the rumor mill if nothing else) about a bi IPO, particularly with all the auditing required, so we're already running out of 2011 for that.

[adaugelli]

The lack of IPOs in the market is more myth than fact:

From PWC:

With 154 IPOs completed, that raised a total of $37.5 billion year-to-date, 2010 activity represents a 123 percent increase in volume and 49 percent increase in value, compared with the $25.2 billion raised from 69 IPOs in 2009. In addition, PwC says the surge of activity in the fourth quarter of 2010 confirms the IPO market has recovered from the doldrums of 2008 and 2009.

Source:

http://www.pwc.com/us/en/press-releases/2010/us-ipo-market-v...

Specifically in tech:

Since the beginning of 2010, 37 technology companies have gone public, with total proceeds of $5.1 billion, according to Renaissance Capital, an IPO research firm. That's a big uptick from the same period last year, which saw 17 IPOs priced.

Source with top 10 IPOs of 2010:

http://www.thestreet.com/story/10928161/2/techs-top-ipos-of-...

Just because the big consumer names are choosing not to go public, does not mean that IPOs are not happening.

[code_duck]

I think that Google would very much like to acquire Twitter. They see their lack of success in the social area as a problem, and anyone - MS, Yahoo, facebook, etc. would love to own Twitter. The problem is as you note, Twitter doesn't seem at all interested in being acquired.

[axod]

I think the twitter hype has long peaked.

Could turn into another Digg.

[code_duck]

Twitter seems to be doing fine, to me. It's a unique and focused service. Digg was doing fine as well until they released a site makeover that completely ignored why their community was interested in the site. Twitter's recent improvements were well received, in contrast.

You've actually of that opinion about Facebook, but meanwhile, large numbers of people never cease to predict that Facebook will soon control the entire universe. So, opinions vary.

[axod]

They're extremely different though. Facebook has a good, proven business model. They kept control - people generally go to facebook.com.

However, twitter gave away control to 3rd party clients. Only a tiny number of twitter action comes from twitter.com.

When most of your userbase uses 3rd party clients, you have very few monetization options.

[Kylekramer]

I don't know about that. Among the early adopter crowd, it is certainly true, but Twitter much larger than that group now. Most people use Twitter from the web or from an official Twitter app. I still think Twitter is going to have very serious monetization problems, but third party clients aren't really a problem. If anything, the third parties should be concerned about hitching their wagon to a company that might not be too concerned about their success.

Reference: http://blog.twitter.com/2010/09/evolving-ecosystem.html

[code_duck]

Quite true, it's not fun at all to develop software or a business based on a platform and service that might change to make your business obsolete at anytime.

Fred Wilson, an investor in Twitter, made a post when the article you linked to came out, stating how fantastic he thought it was that Twitter was screwing over their third party developers. A shift from 'filling in the gaps' to 'building on the platform', he thinks. This doesn't make me comfortable as I depend on a couple of other companies he is involved with.

[code_duck]

That's about whether Twitter will make a lot of money, though. The 'digg' issue is not that digg failed to monetize, but that users abandoned it in droves and it seems irrelevant, isn't it?

Twitter could always restrict their API, too, to discourage or make some third party tools obsolete. This would only be accepted if they made their own available with applications similar features and quality.

[bluelu]

On Digg, you had at least real persons signing up and some type of community. Twitter users are marketing people or self loving/promoting people. No normal person would sign up because there is simply no use to it. In 2-3 years, twitter will be dead.

[code_duck]

I suppose you hadn't read Digg very often in 2008-2009. It mainly consisted of marketer-promoted stories, and kids posting ASCII Picards and one line, monosyllabic comments in response to these stories. The sense of community was much lower than on sites like Reddit.

Twitter is actually doing a great job of blocking spam - I used to get a few spam followers a week, now it's rare.

I follow a lot of programmers and project leaders on Twitter and your analysis, as well as the one above, are dead wrong. I constantly hear about news and see good links on twitter hours or days before they show up on places like HN or Reddit.

[RobbieStats]

Demand Media is going to be a big IPO and is scheduled for Jan/Feb.

[sushi]

You said Big?

The company loses more money than it makes. How it it gonna be big?

[adaugelli]

Agreed.

They just amended their S-1 to explain how they account for the costs of production for content.

http://kara.allthingsd.com/20101223/demand-medias-ipo-which-...

Rather than expense the costs on payment (like every other publishing company), they are trying to amortize it (like a machine or factory) over a four year period.

If they treat costs like every other company in their industry, they are losing a significant amount of money each year. (More importantly, in real world cash accounting, they are burning through significant amounts of cash each quarter.)

If they go public, investors who don't understand the underlying risks of the Demand Media Business (like Google changing their algorithm) or understand why this type of accounting artificially inflates profits will get burned - and it will hurt the overall technology ecosystem (much akin to the everything.com IPOs of the late 1990s)