A friend asked if I took requests for my bits and bytes. He’d just read the news about Twitter CEO Dick Costolo standing down and wanted to know why Twitter wasn’t making any money.
It would be good to hear your thoughts on why Twitter is losing money when other social platforms are doing so well. I was surprised as Twitter doesn’t have a direct competitor like Google has other search engines / email providers etc. to compete with.
A quick search shows that losing money isn’t a new thing for Twitter:
- Twitter has over 300 million users, but is still losing money – Engadget, 28 April 2015
- Twitter Is Losing Momentum and Money – Valley Wag, 29 April 2014
- Why Twitter Isn’t Turning a Profit – Mashable, 3 October 2013
Their IPO in 2013 included the worrying words: “We have incurred significant operating losses in the past, and we may not be able to achieve or subsequently maintain profitability.”
So why isn’t Twitter making any money?
Twitter is an unforgiving place for new users
A new account is easily set up but to really get value out of Twitter you need to spend some time curating the accounts you want to follow, set up some lists and get your Tweetdeck sorted out to have that sort out all the irrelevant noise and leave you with a feed genuinely interesting, funny and/or educational Tweets. Unless you have a seasoned Twitterati to guide you, you won’t know how to go about it and you won’t get to see interesting content. So, new users get bored and are unlikely to come back after their first few attempts at making sense of all that noise.
Twitter boasts of over 300 million monthly active users – that means it has 300 million accounts that Tweet once a month. Now, unless you’re Justin Bieber and have a zillion followers, Tweeting once a month isn’t going to get you anywhere and it’s also not going to be interesting to advertisers who want active users to target with ads. Worse still, research by PeerReach found that only about half of Twitter’s monthly active users actually Tweet once a month.
And, to put that number into perspective: Facebook has 1.4 billion monthly active users – 65% of which log in every day.
Twitter hasn’t added anything fundamentally new
Nate Elliott, an analyst at Forrester research, wasn’t surprised by Costolo’s departure: “While other social sites have introduced new features and functionality the past few years, Twitter has mostly stood still. The result has been excruciatingly slow user growth.”
Now, I’m not sure that I’d completely agree with that statement – Twitter has rolled out a bunch of new features, most recently removing the character limit on direct messages – but that these were a) to catch up or stay in line with upstarts like Instagram, Snapchat and WhatsApp or b) to keep advertisers happy.
I’d argue that Twitter hasn’t really added anything fundamentally new to the platform – perhaps removing the 140 character limit on direct messages is a sign that it is ready to start now?
Instead, it has focused on pleasing advertisers with lots of different ad formats and targeting features – here’s one launched just this week: it allows advertisers to target you on Twitter depending what apps you have on your phone – but in order to be interesting to advertisers and investors, Twitter needs to be able to show that they are gaining new users.
It’ll be interesting to see if it remains the niche playground of übergeeks, journalists, marketing & PR bods as well as celebs, sportspeople and brands – or if the new CEO comes in and decides to focus on the user and give give everyone the power to create and share ideas and information instantly, without barriers.
Wall Street sees going with a new CEO as a good thing: Twitter shares rose 3.6 percent to $37.17, suggesting investors thought Twitter to be worth more without Costolo, to the tune of $900 million.
Talking with pictures
Snapchat CEO Evan Spiegel posted a film to YouTube this week titled ‘What is Snapchat?’
It looks like it was filmed on an actual potato – but in under four minutes, Spiegel explains how social media is evolving and how the way we use photography is changing.
The film provides a succinct snapshot of how Snapchat ‘gets’ today’s younger audiences and provides them the tool they need, while Twitter doesn’t. The reason why Snapchat user numbers are growing is that it echoes the evolution of social media and that it is in step with how teens communicate: they talk in pictures and short video bursts.
- Photography used to be about saving memories –> Snapchatters use images to convey a message, an emotion. Emoji anyone?
- We used to sift through all of our favourite photos from our holiday and then share our favourites –> Snapchatters take photos continuously, sharing them with friends in real-time or building a story of their day
- Our digital identity used to be carefully constructed from all the carefully curated photo albums of our life –> Snapchatters make up their identity as they go along, constantly changing, not as a result of their past. It’s about who they are and what they’re doing right now
Bits and bytes
- Interesting to see two great articles about code this week. The first, from BBC iWonder, is a piece on the history of code and the key individuals involved and the second, this epic piece by Bloomberg from the perspective of today’s C-suite exec who are confronted with code and the people that write it
- Another must read this week is a marvellous piece by Backchannel comparing how the automated home plays out for Baby boomers, Gen X and Gen Y with a focus on security, environment, personal health, fitness and hobbies
- Rolling Stone has compiled a list of the top 100 Instagram accounts – and because Kim Kardashian is at number one, I nearly didn’t include it i this post. But there is so much other goodness in there, you can just stop at number two
- Could emoji replace the PIN number as a security code?
Videos of the week
An older film, posted three months ago but I hadn’t seen it until @kahui sent it to me.
It punched me right in the feels.
In a beautiful way.
Parallel parking? No problem with Fiat’s parking billboard assistant.
Air on the side of humanity – nifty brand campaign from Jet Blue.
There’s one person who shouldn’t have told this joke.
“FIFA president Sepp Blatter, the director of communications, and the secretary general are all sitting in a car — who is driving?”
That person is FIFA’s former director of communication, Walter De Gregorio, who told the joke on Swiss television this week.