Does the big bird have wings? Twitter is beset with problems on every front, many of which are intensifying rapidly. If you are a Twitter user or a Twitter investor, you’ve got to be wondering and worrying whether Twitter has the financial strength and strategic smarts to overcome its problems and become a thriving communication platform and profitable operation.
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Here is what Twitter is up against.
1. Twitter by the numbers
Twitter stock (TWTR) has shot up 25 percent over the last three months, thanks in part to the success of its live video streaming, a healthy increase in active users, and an overall bullish stock market (a rising tide lifts all boats).
Nevertheless, the long-term forecast for Twitter is mostly cloudy:
- Revenues are declining in 2017.
- Twitter has never turned a profit. In 2016 the firm suffered a net loss of more than $456 million.
- When Twitter entered the stock market in 2013, its IPO price was $26 per share — and quickly jumped to a hair over $50. Twitter’s current stock price is $16.39 per share.
These numbers suggest prosperity is not around the corner, but rather that Twitter’s future is around the corner.
2. User engagement is at odds with itself and with ad revenue
It’s likely that the recent uptick in Twitter’s users has something to do with a surge in politically themed conversations. Candidate and now President Trump’s tweets, along with active tweeting from politicians and partisans, have begun to dominate not only Twitter, but also news media in general — the new news story template is, “‘X’ tweeted this, and ‘Y’ responded by tweeting this.”
Many political tweets are extremely partisan, divisive and off-putting to not only other types of Twitter users but also to advertisers. With political sensitivity at such a high level everywhere on the political spectrum, Twitter’s advertisers are sure to offend someone; a much safer course would be for them to take their advertising elsewhere, to less politically charged social platforms. This possibility does not bode well for Twitter’s revenue production.
Many Twitter users have begun to turn away from the platform — not only because of unpleasant conversations but also because of the endless trolling on every topic, bot-driven spam, “fake news,” and aggressive sales and marketing tweets (“noise”) from every type of business under the sun.
3. No easy answer to conversational catastrophes
These conversational issues, which seriously damage the Twitter user experience, have no easy answers. Twitter would love to stamp out “fake news,” but how? It’s censoring of users based on their opinions can’t help but seem unacceptable, unwarranted and/or unfair, depending on each particular user’s point of view. Determining what information is truly, objectively accurate (i.e., not fake) for 6,000 tweets per second cannot be done.
Bots? Seems like the only way to stamp them out once and for all would be for Twitter to demand all user accounts be verified, something it is unlikely to do because many users will be unwilling to comply. The issue of whether Twitter users have the right to be anonymous is a quagmire unto itself. Regardless of how one feels about anonymous social media users, anonymity facilitates shrill and offensive tweeting that drives away serious-minded users.
It’s certainly true that Twitter is not the only social platform beset with these communication problems. However, if a platform is making money hand over fist (say, Facebook) it has time to work out solutions. Twitter, with the profitability clock ticking like a time bomb, does not.
There are ways Twitter may be able to survive, turn a profit and satisfy its user base:
- Facebook could buy Twitter. Despite the wretched financial numbers, Twitter has strategic value to the right buyer, and Facebook is the right buyer. Clearly, Facebook has the ambition and financial wherewithal to do it, and operationally, it has the expertise to give Twitter a more effective advertising program and a more robust user platform.
- Users could take more responsibility. There are many ways for Twitter users to filter conversations and trim their streams to people they really want to engage with — users simply need to learn how to use these filters. Businesses could use more discretion and self-restraint, recognizing that their endless self-promotional tweets are doing more harm than good. No matter what the social platform is, it will be only as good as its users.
- Twitter could segment its platform. Twitter resembles the Tower of Babel because it really is like that — there’s too much going on. Perhaps there should be a Twitter platform devoted to politics, entertainment, business, etc. Doing this might well improve the user experience, cater to the user’s real interests, and help advertisers get a better ROI and branding effect. Segmentation is tried-and-true marketing; we shouldn’t live in a world with 10,000 kinds of running shoes but only one Twitter.
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