Twitter Fraud: Does Twitter Encourage Microblogging Scams and Fake Profiles?

twitterTwitter is at a microblogging crossroads. Each month, 60% of its users (Twitter Quitters) disappear. The churn rate is so high that Twitter has to take drastic measures to build its “community.” And that’s where  social media “gurus” come into play. Twitter turns a blind eye as black hat Internet marketing techniques are used to create multiple accounts with fake profiles, automated software is used to build large lists, marketing employees and independent contractors spend their time dumping out tweet spam, and autofollow leads to one fake profile following another…and vice versa.

There’s a a classic cartoon that states that on the Internet no one knows you’re a dog. On Twitter, many  followers/followees don’t exist except as part of someone’s social media list-building model. Community and providing value has little to do with it. Instead, by following a Twitter spammer, you’ll receive pithy tweets ripped straight out of Poor Richard’s Almanack, The Secret, Chicken Soup for the Idiot’s Soul, and interspersed from time to time with a pitch for you to click on a link that will take you to an e-mail lead capture (squeeze page) so that you can be marketed to by e-mail too plus get redirected to a sales page after providing your e-mail info. Want to launch a garbage info product about social media? Create a bunch of fake buzz (astroturfing) by having multiple fictitious Twitter users tweet about it to their followers.

Why would Twitter allow/encourage this type of fraudulent behavior to take place?

With a monthly user retention rate of 40%, Twitter needs scam artists to game the system in order to build up the raw numbers of its community. Like The Matrix‘s* Agent Smiths, tweeting spambots spread as a virus that Twitter finds beneficial because the community looks larger despite the number of humans who come and go.

matrix-agent-smith

The venture capitalists who have invested tens of millions of dollars are looking for a return on their investment. However, Twitter hasn’t figured out how to turn a profit from tweets.

To cash in, Twitter needs numbers, real or not. Here are two examples.

1. Advertising Revenues. Twitter is exploring means to capitalize on all of the marketing that occurs by advertising to users. That many of these users don’t exist is irrelevant. What matters is that advertisers think the numbers are real so that advertising buys are made through Twitter. And because most advertising is designed to win creativity awards for the ad agencies rather than produce an economic return on investment for the client paying for the advertising, generic buzz spin about reaching young audiences will be used to justify pouring money down the tweethole without seeing a corresponding increase in sales.

2. The Exit Strategy. The end game for Twitter’s venture capitalists is to go public and have the uninformed investor overpay for the company or, alternatively, dupe a larger company into overpaying as part of a takeover. For an example of the latter, look at NewsCorp.’s acquisition of MySpace (overrun by spambots and fake profiles) for a half a billion bucks.

It appears that Twitter is intentionally ignoring those who use the above methods of list-building and even those who use its system to sell how-to info products on abusing the system. Unless accurate user  numbers are provided to advertisers, current and potential investors, Twitter is looking at the potential for a few nasty lawsuits. And that’s a shame…particularly when the purpose was to build a community rather than a pyramid of nitTwits.

* “The Matrix” is TM & © 2008 Warner Bros. Entertainment Inc.

Fair use of image for commentary.

To get the Matrix trilogy, click this link.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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