The little blue bird is gliding rather than soaring at the moment; it’s no secret that Twitter simply isn’t having the best time of it right now. A very public boardroom fallout during the summer exasperated the issue, drawing the internet’s eyes to the company’s shortcomings ever more intensely.
Investors lost faith in CEO of five years Dick Costolo and handed him a P45 in July. A disappointing earnings call, bringing stagnant growth to light and revealing financial results that fell well below Wall Street expectations, put a clock on Costolo. This was a sharp fall from grace for the man who had previously been named one of the 10 Most Influential U.S. Tech CEOs by TIME and once the plug was pulled, prodigal cofounder Jack Dorsey was brought back as interim head.
Dorsey’s second coming was a Steve Jobs-like scenario. Bring back the man who made you great, even if it’s just for the initial fanfare in the press – everyone loves a comeback don’t they? Months later, @Jack was installed as CEO permanent, this, despite concerns that he would still be CEO of his other company Square (and taking it public for that matter).
The scenario facing Dorsey, quite frankly, isn’t pretty. Twitter has attracted just five million active users between Q1 2015 and Q3, growing its base to 307 million; Instagram on the other hand added 100 million in just nine months. Revenue is up 58% on year to $559.6 million but for Q4 it’s forecasted a maximum of $710 million, versus analyst expectations of $739.7 million. It’s also operating at a net loss of $132 million, down $45 million from a year ago. Not good reading and stocks have tumbled appropriately in response.
Growth is the big issue for Twitter: it’s not attracting much in the way of new users and those currently signed up aren’t engaging, Twitter has millions of inactive accounts just sitting there. There may be hundreds of millions of users using it, but Twitter is a lonely place for the average Tweeter. If you’ve got thousands of followers, it’s very different than if you’ve got just a couple of hundred. That bulk of users who aren’t micro cyber-celebs just aren’t getting heard or engaged with, meaning they give up and go back to Facebook or load up Instagram.
Then there’s the issue of trolls. Costolo recognised the issue and how badly Twitter was handling it in a leaked memo: “We suck at dealing with abuse and trolls on the platform and we’ve sucked at it for years.”
The social network was once hailed as a beacon for free speech, playing a crucial role in the events of the Arab Spring and serving as a platform for social change across the globe. It has now descended into a stage to spew vitriol, hurl abuse and worryingly, doll out death threats. High profile names have left the platform in response to this and bar some weak efforts to curtail the problem, Twitter hasn’t, at this point, got an answer to it. Anonymity is a curse, something Facebook inherently exorcised, and the fact that unless you’re Tweeting publicly, you’re never immune to the abuse. And existing on Twitter on a private account just isn’t really existing on Twitter at all.
New products haven’t helped matters either and failed to engage or entice. The likes of Periscope and instant timelines not exactly whetting the appetite, whilst changing favourites to likes, is nothing but material. New users have very little reason to get involved with Twitter, it’s just businesses, journalists, activists, politicians and a dwindling number of celebs on there now. You have to build up a following to get anything from it; your friends are on Facebook, not Twitter, and shepherding those disciples is a long, lonely road.
That saying, Twitter isn’t quite on its death bed, or its last leg for that matter. The feeling with Dorsey is that it’s his baby, he can shake it up if he wants to. Costolo was the man brought in to make it credible, oust out the immature startup founder and turn it into big business – without appearing to lose its soul. Dorsey has returned a more experienced, maturer man and brings with him the right to fundamentally change the product if he deems it necessary. Twitter remains a key source of news and a catalyst for it, very few products have the ability to provide such a personal subscription to stories users want to hear. This is currently the social network’s key selling point and one that will keep it around for many more years yet. And whilst it is follow me, @AlexWoodhall