News outlets have been covering the story of Twitter's flotation on the stock market, with a valuation of $18bn. Shares were offered at around $26.
A couple of these recent flotations - I'm thinking of Facebook and, in the UK, the Royal Mail - have given me pause for thought at the economic models that underpin them. In short, I think they are a rip-off. Why? Because they miss a chance to have the stake-holders investing in the company as shareholders, opting instead for large financial corporations as investors, who have just one single motive: profit.
Take Royal Mail for example. One commenter to a national newspaper put it this way:
'I am a British Citizen. I already own a bit of the Royal Mail thank you very much. What the government mean when they say the share offer is 'your chance to own a bit of Royal Mail' is that they're stealing my bit and flogging it off very cheaply so their City friends can make a lot of money.'
With its recent sale my stake in wanting that business to succeed has withered.
Which brings us to Twitter. What could possibly make it worth $18bn? The answer is obvious: you do, or at least, those of you who 'tweet.' It is entirely the content of tweeters that generates that wealth. Nobody goes on to social networks to find something to buy. You go there to connect with friends, the ad revenues upon which the service rely as its sole income stream are 100% dependent on the traffic generated by users, who offer their tweets for free. It leaves a rather bitter taste to realise that people are going to go all out to make money out of it.
This isn't a 'fringe' opinion. Technology writer and expert Stephen Johnson wrote in Wired in 2012:
'with Facebook we are ultimately just tenant farmers on the land; we make it more productive with our labor, but the ground belongs to someone else.'
The sociologist and technology writer Geert Lovink goes further in Networks Without a Cause - probably the first serious critique of social media:
'We are honoured to be invited by "the Machine" to submit our opinions and preferences. We give in to the pressure to categorize data and join the swarms of 'collective intelligence.' Donate your wisdom to the crowds. We are invited to create reading lists, rank music and evaluate the products we consumed. User bees working for queen Google. It is so tempting to become part of the online 'pollination' world, as French economist Yann Moulier coined it, with billions of users acting like bees that fly from one website to the other, adding value for the owners.'
Facebook advertises itself as 'free - and it always will be,' and Twitter is also a free service. Newspapers and other sites such as this one rely on advertising to allow them to generate content that we want to read. But advertising - the interruption of our visual space, the mining of our content for patterns to be used to target us precisely - when done on social networks, feels different. It feels intrusive. The 'free' aspect is only about upfront monetary cost; 'freedom' - by which we might include privacy about what we discuss with friends - is not on the agenda.
Are there any alternatives though?
I think there are. I would love to have seen Twitter move to becoming a collective or cooperative of sorts, with each user gaining a stake of the business proportional to the relative clout of their content. This would at least mean that those who were generating the content upon which ad revenues were made had a stake in those profits. Alternatively, I for one would be perfectly happy to pay a small subscription to use Twitter, in return for no ads.
I seems that we are blinkered, that in a world with such technological creativity there is such economic stagnation. The same old models being used for the benefit of the same people, over and over. I'll keep tweeting, I expect. But after today I'll do so with a little more irritation at the economics that supports the service, and a little more hope that some pirate somewhere might come up with a mutinous alternative.
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