Editorial: Twitter Trouble

Feb 08 2014, 02:40 IST
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SummaryTwitter stocks fell because of slow user growth but the numbers also mean a lot more room to grow

Slow growth in user base—a meagre 3.8% increase in user numbers since the last quarter—and tepid engagement by existing users in the fourth quarter of 2013 caused investor confidence in the micro-blogging site, Twitter, to erode. The company's stock fell by as much as 18% in after-hours trading on Thursday after it made the figures public. Now, one would be tempted to juxtapose this fall with the surge in Facebook shares after the latter announced its quarterly figures late last month—this was despite Facebook seeing similarly sluggish addition of new users—and ask if Twitter has plateaued.

After all, many claim that social media saturation is already here.

User-numbers, curiously, could be Twitter's weakness, and also the single-most important opportunity for the company. The current figures, 1.4 billion monthly users for Facebook and 241 million monthly users for Twitter, give away the stark difference between the two and perhaps explain why Facebook stocks were up while Twitter's fell despite comparable sluggish growth in user base. Facebook's massive numbers give advertisers immediate outreach to nearly 17% of the world's population while Twitter manages just 3%. But with only 40% of the world's population having access to the internet, the room for growth for Twitter is much larger than it is for Facebook. What should Twitter do now? Adding more features, something that Facebook has done to hold user-interest, may not work out greatly in its favour because the spartan nature of the platform is also its top draw. User behaviour research, fervently endorsed by Twitter CEO Dan Costello, could be an answer. Reuters reported a possible move to organising feeds topically rather chronologically as something Costello is considering. This could ramp up timeline views, meaning more frequent engagement by existing users while offering new users a more organised platform to air their take on hot topics on the internet.

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