Twitter – why does nobody want it?

Twitter bird ()

The facts

Twitter has 313m global users and a little under 4,000 employees. In Q2 2016, it posted revenues of US$602m – up 20 per cent year-on-year. The majority of this was from advertising ($535m), while the remaining $67m was gleaned from data licensing and other smaller areas. When the company went public in 2013, Twitter was hailed as a $25bn company (you’ll recall that LinkedIn sold earlier this year to Microsoft for $26bn) and Bloomberg ran with the headline: ‘The Price of Innovation is Now at an All Time High’.

So where are we today?

Twitter’s stock has fallen significantly – it’s current value falls around the $11bn mark. The $602m revenue cited above was overshadowed by a $107m net loss for the quarter, and even a recent lift buoyed by numerous takeover rumours could not lift the stock back to anything like its January 2014 peak. The next set of Twitter results are due to be published on October 27th and the company will take a decision on its future then. 

Why does nobody want it?

It’s probably unfair to call Twitter an ‘unwanted company’. An $11bn valuation is still not small change. This sentiment has largely been fanned by two recent high profile shunnings of the social media site from high profile potential suitors: namely Salesforce and Disney. But we can’t deny that Twitter is going through a difficult period right now, and there are a number of reasons as to why it may no longer be as valuable as once perceived:

  • Monetary: Twitter has never really got close to profit, and this week Business Insider said that analysts were starting to point to the 11 market quarters that Twitter had been listed for without positing a healthy P&L.
  • Physical: from a dimensional point of view Twitter is just not Facebook – it is much harder to generate advertising revenue from a 140-character text timeline than it is from the size and scope of the ‘Face’ ‘Book’, which is an online incarnation of an old school form of media.
  • Content: for my money, Twitter is really a technology and not a media company. Content deals are fine, but it primarily acts as a distribution channel for wider content and as such is not necessarily a destination in and of itself.
  • Aesthetic: again in comparison to Facebook, which now also owns Instagram, Twitter is very text based. As the web has shifted to become more image orientated in recent years, Twitter’s character-led communication service has arguably got left slightly behind.
  • Abuse: on top of all that, Twitter has a problem with trolling. Or at the very least, an industry perception of a problem with trolling. Instagram recently rolled out more tools to help stem the tide of abusive content, playing to the wants of its corporate users in the process. Twitter is still very much seen as a primary point for uncontrollable online abuse, and for that reason a company like Disney must understandably proceed with extreme caution.

What next?

The obvious route to salvation is through Google, and a deal that has been talked about many times over the years. Google has itself struggled to monetise social media through its own failed attempt: Google+. Twitter has conversely struggled to establish itself as a media company within its own right, as opposed to a linking mechanism betwixt content and consumer. Imagine a world in which your Google search page was fully integrated with Twitter technology, where you could ask for social feedback alongside conducting computerised search. That day may well still come and if it does happen, expect the battle between Facebook and Google to heat up even further. 

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