Bloomberg Contributing Editor Paul Kedrosky, on Bloomberg’s “In the Loop”, spoke about what problems faces Twitter Inc (NYSE:TWTR). He said that the problem was not with the market, but definitely with Twitter Inc (NYSE:TWTR).
” […] Pretty remarkable tailwinds in this market in terms of growth, particularly in the mobile advertising market, up more than 100% year on year. So it is not really market-related, it is much more Twitter-related.”
He argues that there are two things wrong with Twitter Inc (NYSE:TWTR): the ability to on-board new users, and the ability to keep them. Speaking on the monthly active users (MAUs) component that anyone can easily track.
“[…] Monthly active users are really the growth and which have really flat lined over the last few quarters, (and it is) a function of their ability to bring in new people and keep them. People have a tendency, as one Twitter executive told me, have a tendency to fly new users into the side of the mountain and as a result, the growth in new users is not going anywhere,”
He reasoned that, “The new user experience is not very straightforward. […] What exactly you are supposed to do once you get there is not clear to new users. Twitter will show you an assortment of people that you might follow. They will typically show Oprah Winfrey and a few other celebrities.”
But as people will not understand why they are being shown these, or why they should care about it, he said, “they play with it whimsically for a while then they leave.”
“The secondary problem is that many, many users think that to be on Twitter you have to tweet, but if you think about it, it is nonsensical. Many people use Twitter for consumption only, to read, to track headlines. You don’t have to tweet […],” Kedrosky added.
Twitter Inc (NYSE:TWTR) has attempted to show that they are still successful through the number of logged-in users. However, Kedrosky is of the opinion that logged in users are not really the best way to show you are succeeding, and that MAUs should be shown.
The World Cup effect would be perfect for Twitter Inc (NYSE:TWTR), as many would tweet and retweet during such a global event, but as Kedrosky says, there are “no global synchronized events every quarter.” The World Cup will help this quarter but will also drive home the problem. This is in contrast to Facebook Inc (NASDAQ:FB), which continues to innovate and experiment.
Disclosure: none
Suggested Articles:
Most Popular Fast Food Chains In America
Cheapest Cities To Live In The World
