Twitter’s format is fundamentally archaic.
I imagine the total addressable market (roughly) to be:
- humans with an internet connection
- Total their clock time
- Subtract all the time they are otherwise necessarily occupied (sleeping, working, etc. etc.)
The remainder is the time over which all media companies are vying. Twitter is competing against Netflix, Tiktok, physical books, etc. Some of these things can be done concurrently (watching Netflix while surfing the internet, listening to radio while driving), so add that time back or double it, whatever. But, basically, this is the state of play.
To say that Twitter is not competing against Tiktok, Snap, IG, etc. is to obscure the true state of play and competitive landscape. In 99.9% of cases†, you cannot scroll Tiktok and Twitter concurrently. So one or the other (or neither) is displaying ads to you. One or the other is generating revenue from those impressions. It is not really users over which they are competing. Rather, it is the ad inventory. The ad inventory is a function of time on site/app. Of course, ad inventory is definitely also a function of users–hence the focus on active users (xAUs). On that front, Twitter is a small fry[1]:
- Facebook (Meta): 2.9 Billion MAUs
- Instagram (Meta): 1.5 Billion MAUs
- TikTok: 1 Billion MAUs
- Snap: 557 Million MAUs
- Twitter: 436 Million MAUs
So, Twitter would have to generate a heckuva lot of engagement per user to generate anywhere near the inventory of other social media platforms. But we know they don't, as evidenced by their revenues and ARPU [2].
† I'm swagging here, but you get the point
[1] https://blog.hootsuite.com/snapchat-statistics-for-business/
[2] https://stockdividendscreener.com/information-technology/com...
Twitter is relevant because a very specific audience of multipliers (particularly journalists, but also other influential public figures) use Twitter - often in person, while some marketing company runs their Facebook account. The public reach that Twitter can potentially provide is much bigger than that of any other social network, even though those networks may nominally have a multiple of the number of users of Twitter.
Musk gets this, and it is why he is interested in Twitter. The market doesn't get it, which is why it undervalues Twitter. However, you cannot blame the market for that; it is poised to undervalue Twitter, because the actual value of Twitter is not accessible to just anybody, but people like Musk, who are well-connected in the Twitter social graph. Hence the value of Twitter to someone like Musk is actually much larger than the value of the exact same Twitter to any random shareholder.
Sadly, I think you might be more right than wrong for far too many people.
