Will Twitter Sell Vine Instead of Killing It?

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When Twitter (NYSE: TWTR) announced last month that it was selling the six-second video app, Vine, there was a quite a bit of pushback from users. They weren’t satisfied with Twitter’s offer to keep an archive of existing videos and let the creators download them once Vine was laid to rest. But then, it seemed, people were coming out of the woodwork offering to buy the service.

Twitter bought Vine in 2012 for $30 million, but the offers are rumored to be coming in at under $10 million. That is still far better than getting nothing at all after just discontinuing the service, particularly since a New York Times article reported that it costs Twitter about $10 million a month to keep Vine running.

Vine was Twitter’s attempt to keep up with Instagram’s roll out of video, but there has been speculation that the six second limitation crippled its revenue generating potential. Considering the success other social media networks have with advertising, it’s surprising that Twitter didn’t consider extending that time limit in order to make the application more attractive to advertisers, rather than just giving up on it.

For instance, Facebook recently announced that they had pretty much reached the capacity for ad revenue on its site due to the feed size limitations. However, Mark Zuckerberg’s decision to purchase Instagram – which was ridiculed for the billion dollar price – now looks like genius, because the popular photo and video app provides plenty of additional potential for advertising.

Twitter is having more than its share of woes at the moment. In addition to shutting down Vine, the company is laying off around 350 employees in an attempt to cut costs in light of its gloomy growth forecasts and having a major problem finding anyone willing to buy the company itself.

Just getting rid of Vine’s operating costs will be a bright spot at this point.

 

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