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Twitter – Bird Down?

Twitter – Bird Down?

Silicon Valley, we have a problem! Unless you lived under a rock the last 5 years you must have heard  from Twitter.  It made numerous headlines with its easy to share 140 character “tweets”.  Surprisingly, despite Twitter seemingly  being everywhere, its stock hit an all time low last month. For the first time since its IPO in 2013, Twitter’s stock has dipped below the price it went public. We will delve deeper into the issues Twitter faces and the reasons investors are losing faith in the company that was once seen as the Holy Grail of Silicon Valley. Twitter’s History The concept behind Twitter emerged in March 2006. A year later, Twitter. Inc was founded. It immediately racked in several awards for its bold concept and innovative idea. January 2009 was another milestone for Twitter. A user sent a tweet with a picture of the US Airways plane crash in NYCs Hudson River. This before any media even knew the plane crashed: people understood the power and influence Tweets could have. In 2013 Twitter filed for an IPO. Since then it acquired several companies that allowed Twitter to grow and be used for different media types. The amount of Tweets sent around has soared, the user base rises month after month.   The stock peaked around Christmas 2013 at 73$. Since then, the stock has declined significantly  to hit an all time low at the time of writing this article: 25$. Why? Three problems but an IPO ain’t one An inherent problem with Twitter is  that it remains difficult to define. Even for the founders, giving a clear definition of Twitter is difficult. Is Twitter a social media, a micro blog site or simply a way of engaging in conversations with people we are familiar with?  Is it all of that at the same time? Additionally, despite the impressive amount of active users (300.000.000+  every month)  Twitter remains difficult to use and has trouble reaching the mass market. Twitter doesn’t need journalists, celebrities or so called “influencers”, they need the average Joe to subscribe to generate critical mass to break through and leverage its position. Lastly there is the income generation. Despite Twitter posting higher earnings, these fell below the predictions of Wall Street analysts. The last thing Twitter needs is Wall Street turning on them. Everything to gain Let’s not forget Twitter is a young company and their product is unique. They are experimenting different ways to monetize their products. Some will fail, some will take time to mature and catch on. They are making progress though, sponsored tweets being or the strong ties with pintrest are two examples. They are also among the pioneers of mobile advertising. Nobody thought mobile advertising would ever become a thing, but the market is already worth 32 billion nowadays. This will grow and Twitter is well placed to grab a  large chunk of this emerging market. Another card to play is the acquisition of  interesting companies. Some examples are Vine, Snapchat and Periscope. All of these gathered a significant user base and are viable stand alone products. This gives Twitter a diverse portfolio enabling it to create synergies. The different apps also aim at a different public which ensures Twitter is in touch with young & old. Will they catch it or let it slip? We’ve explained that there are cards to play. Although investors are turning on Twitter, the share price evolution is not representative for the opportunities that lie ahead of Twitter: these are increasing. The main challenge for Twitter will be to embrace these opportunities. The current management may have to be reviewed/replaced in order to bring fresh ideas to Twitter as they have proven they are not performing up to expectations. Co-founder Jack Dorsey has recently taken over the position of Interim-CEO after disappointing earning results ousted Dick Costolo. Potentially the start of a new refreshing wave at the top of Twitter.  One that enables them to break through for the general public. Twitter has to realize its no longer a social media, or a text service. It has become a communication tool that enables entities to interact quickly and closely with one another. A tool that allows businesses to have a very close relationship with its clients. I am convinced that if Twitter plays it’s cards right it will become one of the dominant players in the global marketing business. It will also be a suitable way for businesses to create a stronger relationship with its clients as it allows a clear and precise communication channel between the two.  Tweet on! If you’d like to know more about promoting your business on Twitter, contact the social media experts at Hifluence via Email or by Phone +32 3 84 32 900. We’ll help your brand grow big. Laurent Delbar