Twitter has been in the news this week, and it’s not good news for the San Francisco-based social media platform.
Twitter was there at the beginning of the social networking craze, often seen as a viable alternative to Mark Zuckerberg’s venture. Before its IPO in 2013, Twitter was often considered able to compete directly with Facebook. However, Facebook has now surpassed 1.5 billion monthly active users, effectively leaving Twitter in the dust – they average around 320 million monthly active users.
The lack of growth in their user base is reflected in their finances. In the last quarter, its revenues were up 58% year-on-year, but this is a sharp slowdown. In the previous year, sales for the same period had more than doubled.
Twitter is in dire need of something innovative, something interesting and exciting, which can spark new user interest. Ian Maude, from the digital marketing company Be Heard remarked that “Loads of people try Twitter briefly, don’t find it interesting, or too much like hard work, and disappear”.
Rumours have been circulating that Twitter is courting the idea of a 10,000 character limit, moving away from its original policy of a 140 character limit. This is perhaps just one of the ideas that Twitter is considering as it seeks a way to break out beyond its core audience.
Twitter’s shares are currently down about $20 from a year ago, so is the future of the social media platform secure? Or should we be worried?
Just this week, Twitter CEO Jack Dorsey confirmed the departure of four top executives, at a time when Twitter really didn’t need any bad press. Just the week before, shares in the social network had fallen to an all-time low following an outage which had seen Twitter down for millions of users. Shares fell more than 5% to $16.95, and on the 20th January, this worsened and dipped under $16 for the first time. Media company News Corp had to deny rumours that they were considering taking over the firm.
There could be a company turnaround however – most of the company’s declines (the company’s stock has tumbled around 77% since December 2013) were under Dick Costelo, who left Twitter in July. Twitter has now reinstated CEO Jack Dorsey, and he appears prepared to initiate some changes. He started by laying off 8% of Twitter staff, instead focusing money into engineering and product development efforts.
Will Dorsey succeed with his revival? The stock market isn’t convinced, but it has certainly been wrong before.
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