Twitter Inc (NYSE: TWTR)
Twitter has been having a rough time as of late, however, it seems as though the company’s stock is picking up yet again. After announcing more new advertising testing, TWTR is climbing in the market today. However, is new advertising really what Twitter needs? In my opinion, the answer is no! In fact, I believe that Twitter is incredibly misguided at the moment and that in the long run, we’re going to continue to see the massive declines we’ve seen from the stock. Today, we’ll talk about why.
Twitter Continues Focusing On Advertising
Throughout the year, Twitter has been working hard to find ways to make more money off of its current active users. Most recently, TWTR announced that it is working on promoted tweets. Twitter currently has promoted tweets, however, users must be logged into the social network in order to see them. The problem here is that several users don’t log in on a regular basis. As a result, the company is testing promoted tweets to logged out users – 500 million of them! The new program being tested sends promoted tweets to the desktops of users! This ultimately increases the advertising audience for TWTR to 800 million.
Is The Leadership At TWTR Absolutely Crazy?
I know, that seems like a pretty irrational question. However, when you dig into the details here, the question is far from unwarranted. Let’s look back to the issues that have caused TWTR to decline so very much, dating back to 2014. The problem is relatively simple to understand. The company simply hasn’t been able to bring in new users and get those users to stay active members of the Twitter community. The issue became such a big problem that Dick Costolo was forced to resign as the CEO of the company. In his place, we have Jack Dorsey.
Now, keep in mind that Dorsey has been the active CEO for TWTR for quite some time now. In the time that he’s been the CEO of the company, we’ve seen quite a bit with regard to growing advertising opportunities, but very little with regard to growing users. In fact, the user struggle is still ongoing. TWTR still can’t seem to get new users in.
With that said, I’ve got a few key questions to ask. Do you like ads? When websites are overrun with ads, are you likely to sign up? If a website wanted to put ads on your desktop, even when you weren’t logged in, would you want to sign up to be a member of that website? If you’re like most people, the answer is no!
At this point, Twitter is grasping at straws. Yet, instead of focusing on bringing new users in, the company is focusing on bringing new advertisers in and showing more and more ads to their current user base! Pop up ads on a desktop when you’re not logged in! when I first saw this, I thought is was a joke, but it wasn’t – the company really is testing this concept!
The Bottom Line
The bottom line here is that TWTR is way out of bounds here. While the stock is climbing as a result of this test, chances are that the gains will prove to be short term. The reality is that if TWTR keeps doing more to show their current users an increasing number of ads without focusing on user experience, the company’s user issue is going to spiral further and further out of control. Your best bet? Don’t feed into the madness. Dorsey isn’t the right guy. He proved that years ago and he’s proving it again. Until the company puts advertisers on the back burner and starts focusing on users, we’re not likely to see any long term positive movement!
What Do You Think?
Where do you think TWTR is headed and why? Let us know your opinion in the comments below!
[Image Courtesy of Flickr]
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