Since its IPO, we’ve seen Twitter struggle with stagnant user growth numbers and monetization challenges. There was hope that Jack Dorsey’s return would help steer the ship back in the right direction, but no sign of that so far.
Now we’re seeing some industry commentators going out on a limb to say that if things don’t turn around pretty sharpish we could be looking at one heck of a dead dodo.Since its IPO Twitter struggled with stagnant user growth numbers and monetization challenges Click To Tweet
If things don't turn around sharpish for Twitter, we could be looking at one dead Dodo Click To Tweet
“Large scale social businesses grow or die. Flat growth means almost certain death,” says Victor Basta from Magister Advisors, a tech M&A advisory firm. “Yahoo and MySpace are two examples of social businesses that flat-lined and then rapidly become irrelevant. In both cases, valuations didn’t just get cut 5-10%, they lost 80-90% of their value over a short period of time. Twitter’s near zero growth in users and revenue, if not reversed very soon, is likely to lead to this kind of catastrophic valuation reduction. “
As a huge Twitter fan, it drives me mad how they refuse to work on things such as better search, but for all its flaws, I believe that it would be nothing short of a disaster if that came to pass. As Basta suggests, the company should look at ways of innovating rather than insisting on trying to make outdated models – such as monetizing adverts – try to fit
Twitter's importance goes well beyond its balance sheet, and it should be protected Click To Tweet
“When user growth has slowed, Facebook has innovated with new products (Facebook Live), new platforms (Oculus) and intensive machine learning/AI capabilities to continue to grow its presence. Snapchat is another more recent example of positive product and user momentum. We have already seen a sharp drop in Twitter’s value, but there is a lot more downside than upside now in the company’s valuation. Crucially momentum has to reverse very quickly. We reckon the company has maybe a year or two to turn things around and re-establish momentum. Unfortunately this kind of revival is a slow, and very painful process. There is no ‘quick tweet’ solution to arresting Twitter’s decline.”
Another option, which I explored in more depth for this Quartz article and discussed in a panel hosted by CBC Radio is that Twitter’s importance actually transcends its balance sheet. It is, I’d argue, more akin to a public service than a commercial platform, and the public should not allow it to go under.There is no quick tweet solution to arresting Twitter’s decline. Click To Tweet
Specially given the current political climate and the socio-economic impact that a tweet can have, Twitter is a powerful catalyst for democratic movements and a channel that must be kept open to facilitate freedom of speech. How we go about safeguarding it is a debate worthy of a trending hashtag. #SaveTwitter anyone?
Also published on Medium.