Sorry, But Twitter's CEO Is Full of Crap

NEW YORK ( TheStreet) -- All that was missing Thursday morning from the Twitter ( TWTR) IPO spectacle was cocaine, a pack of razor blades, a box of straws and enough cheerleader pom poms to outfit the media.

They acted like rock star-obsessed groupies from the depths of 1985, fawning over Jack Dorsey and Dick Costolo. One of the few guys with the guts to break away from the pack and throw water on the euphoric fire was TheStreet's Jim Cramer.

As practically every single media personality in America tripped over his brother to scream Twitter IPO Pops 73% in NYSE Debut, Cramer urged caution. I laud him for that. It took a lot of guts to do it when the men of the hour -- Dorsey and Costolo -- were within earshot. Goodness forbid they heard what he had said. He might not have been invited backstage and to the after party.

It's that media vacuum at play again with Twitter. I love Twitter as much as the next guy -- and use it more than most -- but I'm unwilling to give the company, particularly its two most visible spokespeople, a free pass thanks to an odd school-girl crush.

Remember, Dorsey's the guy who told us, in April, that Twitter is "not even thinking about" an IPO right now.

Bull.

Costolo is the one who, in August, was reportedly telling bankers he wanted to keep Twitter's IPO "low profile."

The bankers (and the media) won that round!

When Dick Costolo tells CNBC, in response to a strong line of questioning from Cramer ...
I'LL SAY THIS. BECAUSE OUR AD UNIT IS CONTENT FIRST, THE ADVERTISER TWEETS IT OUT ORGANICALLY TO THEIR OWN FOLLOWERS. IT GOES OUT FOR FREE TO THEIR FOLLOWERS AND THEN THEY CAN MAKE IT AN AD. THEY'RE PARTICULARLY RESILIENT TO BEING, FRANKLY, SPAMMY ADS. BECAUSE THEY DON'T WANT TO SEND SOMETHING ANNOYING OR INTERRUPTIVE TO THEIR OWN USERS. SO THE FACT THAT IT IS CONTENT FIRST AND THEN MADE INTO AN AD, MAKES, I THINK, OUR PLATFORM PARTICULARLY RESILIENT AND SUITABLE TO THE MOBILE ADVERTISING PLATFORM
(Caps preserved from original CNBC interview transcript).

Are you going to take it at face value?

I'm not.

First of all, "I'll say this" is another way of saying, "Jim, I don't have a good and/or direct answer for your question, so ... I'll say this."

Second, Dorsey says Twitter wasn't thinking IPO and, poof, a few months later the company had to go public before the end of the year to preserve "secret filing" status. Things must move faster in Silicon Valley than this laid back Southern Californian (that's me) thought.

Third, "I'll say this" went from wanting a "low profile" IPO to accompanying an entourage onto the NYSE floor Thursday morning. If it was so important to fly under the radar, why didn't he stay in San Francisco? I'm not sure if that would have been unprecedented, but it was certainly possible. These Silicon Valley dudes are rule breakers anyway, aren't they?

So, this whole line of content comes first, then it becomes an ad and we won't have spam because we don't create the ads, our clients do is, simply stated, crap. Just as Twitter management has on other occasions, it will pull a Facebook ( FB) and backtrack from any mission it deems righteous, any strategy it considers principled just as fast, if not faster, as Mark Zuckerberg did.

But, let's give Dick and his crew the benefit of the doubt. They clearly have a handle on quality control vis-a-vis the ads the Twitter platform serves.

Why does any of this matter?

It matters, in part, because of what I said, in September, when Twitter tweeted it was going public:
I want to see Twitter become whatever Twitter can become unabated by the pesky requirements of Wall Street investors. Because, there's no question -- Twitter, simply by making the choice to go public, will wind up something other than it would have been had it stayed private ...
(Facebook and Pandora (P)), for better or worse, abandoned their social missions for the sake of revenue and the quest for profit. It depends on who you talk to, but more than a few people -- as they continue to use Facebook and Pandora obsessively -- will tell you that increased advertising and such has hurt the user experience. And I would argue it has taken away from Facebook's mission to connect the world and Pandora's pledge to be a champion for indie artists.
Priorities get out of whack. That's just how it goes. There's really no avoiding it.

Simply put, degrade the user experience to appease Wall Street today, chip away at the allure that put you in the position to go public in the first place. No matter how Costolo spins it, he has already made compromises. He will continue to make them.

Nature of the beast or not, this dynamic matters long-term.

And since most investors were unable to buy $TWTR at $26, long-term performance is all that matters.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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