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Following is a blog post from one of our Twitter global experts:
What’s Ruffled Twitter’s Feathers?
Twitter’s shares plummeted yesterday on the back of a double-whammy bad news update, as the microblogging giant announced admit user growth was flat and engagement amongst its 241 million members was on the slide.
So is something broken in Twitter? Investors clearly rate the platform, with shares soaring more than 150% since their November launch; marketers are falling in love with it – revenue for Q4 came in at $243m versus analyst predictions of $218m – The problem seems to be that everyone understands the potential of Twitter more than the users themselves.
Facebook, by comparison, fits comfortably into most users’ daily digital lives, but a lot of people just don’t ‘get’ how Twitter’s 140 character model works for them. Sign up rates are fine, but the numbers of people who log in more than once a month are falling. Twitter has already taken steps to address this drop off with features such as pictures, videos and conversations being displayed directly in the feed; but more hand holding features for new signs ups like finding friends are expected to help reduce early abandonment rates.
Chief Executive Dick Costolo also acknowledged “We want to do a better job organising content for our users along topical lines rather than just chronological. Topic-based discovery on our platform will make Twitter easier to understand and use for everyone.”
By adding more features and functionality, Twitter might create problems for itself. While its competitors’ growth has been this way, Twitter is loved for its sparse, lightweight model; the more it adds the less streamlined it could become for the user.
The analysts all agree the Twitter model is sound and has a solid standing in the future of social media, but that it is simply not innovating quickly enough for hungry investors. Twitter’s restrained approach stands in glaring contrast to Facebook’s mantra “Move fast and break things”. Throwing caution to the wind just doesn’t fit culturally with Twitter, but it’s what the markets are asking for.
Costolo promises they “will continue to make the product easier to use,” but it remains to be seen if it will ever achieve the mainstream likability of Facebook? 17% of the world’s population has a Facebook account, compared to just 3% for Twitter.
Happily, that means there’s a whole lot more room for growth…Costolo concluded yesterday’s briefings by saying Twitter hoped to change the slope of its user growth rate but “…what exactly the slope of that curve looks like and when it will occur is not something that I can guess at,” Not the reassurance the markets were looking for, but far from a death knell either. Twitter’s prospects can soar and most likely will, the markets just want it to fly a little quicker.