The social-media platform is fading in popularity and failing as a business – avoid the shares.
Twitter’s shares fell from their perch this week, down 78% since listing in New York in 2013, after the company reported its worst quarter on record. Its advertising sales growth has now fallen for eight consecutive quarters and will turn negative before the end of the year, said co-founder Jack Dorsey (pictured), a former fashion designer and massage therapist. Worse still, the platform is waning in popularity. Users are spending less time on Twitter and its user numbers have flatlined at 310 million, trailing younger competitors, such as Instagram and Snapchat.
Ten years after it was founded, Twitter still struggles to answer the simplest question, says Fortune. “What is Twitter?” Faced with intense competition from new messaging apps, photo-sharing platforms and Facebook, Twitter has struggled to define its purpose and edge. Dorsey says it is a real-time window on events as they happen. People tweet most when they’re watching breaking news or live events, and it remains the go-to place for announcements by politicians and celebrities. Twitter, Dorsey says, is “the most powerful microphone in the world”.
Some tech commentators see Dorsey as the “intellectual successor” to Steve Jobs, the tech visionary who repeatedly reinvented Apple, growing it into the world’s largest company. To boost user numbers, Dorsey has made Twitter’s sign-up process faster. But that may not be the problem. More than a billion people have tried Twitter and the majority resist its appeal.
It has persistently been dogged by stories of users being harassed, with celebrities including Stephen Fry, a one-time devotee, complaining that it has turned into a platform for insults and abuse. If Facebook is “the social network”, Twitter is an “angry social network”, says blogger Paul Ford.
Twitter’s head office is often described as chaotic and overstaffed. Sixteen senior bosses have left in the last year, which Dorsey says is part of streamlining efforts. But it is difficult to distinguish between streamlining and a talent exodus. Many have jumped to Slack, a rival messaging service, as Twitter has struggled to build on its quirky product. Some of its catchiest features, including the “hashtag”, were invented by users, rather than staff.
Investors live in hope. Twitter’s shares have rallied since Microsoft coughed up $26bn for LinkedIn earlier this year, as the market bets on Twitter becoming a takeover target. Deals it has signed to broadcast live sports events could make it appealing to a cable TV business that wants to grow online. But bidders will be tempted to wait. Web firms rise quickly and sink just as fast. If an acquirer wants to avoid paying up for Twitter’s $13bn market cap, all it need do is wait. Sell.