2016-03-12
Nowadays the impact of the Internet on knowledge, thinking, writing, politics, and journalism grows (Cross, 2011). As we know, Twitter is one of modern so popular social networks. It can be considered as an inseparable part of social life of adolescents as well as adults. It was founded in 2006. A few years later, the company gained popularity among a huge number of Internet-users. Twitter specializes on publication of short notes or “micro blogging”. This service is free. As specialist Sue Burzynski noted, “Twitter is helping to shape social communication in today's world” (Sue Burzynski, 2014). At the beginning Twitter pays attention to the increasing of a user number. Then company has increasingly reoriented to the commercial part: paid advertising for different kinds of business, new commercial option “Customer Feedback” to identify NPS and CSAT, others.
Main Problem
According to the opinion of some psychologists, the main reasons to use Twitter are the following:
the desire to gain universal recognition, the desire to be noticed by the masses;
trying to self-expression, self-assertion and the desire to emphasize their originality, communication.
At the same time, the main problem of company Twitter is that it provides only an additional service. It is not an obligatory item for a lot of people. The government of some countries prohibits the use of Twitter. For example, Twitter is banned in China, Iran and it is blocked in Egypt, Iraq, Venezuela and Turkey on various bases.
It should be noted, that Twitter strongly depends on the well-being of people. If people will not earn enough money, they will cut down additional expenses (for example, phone bills). The writer Clive Thompson said: “The idea of describing methodological activities in such detail is absurd for many people”. Another critical opinion has been published in the Wall Street Journal: “Twitter causes mixed feelings among the technologically save people, who have been its early adherents”. Thus, if I was a venture capitalist and intended to invest in Twitter, the main concern would be linked to the above mentioned problem.
Analysis
As it identified, the necessity of Twitter is evaluated dissonantly. It remains popular service, but it generates not much income as it is expected. Twitter’s business model is based on popularity of service and attraction more investments for further development. At the same time, it is quite difficult to commercialize service in the appropriate scale. The rapid growth of the company that was marked until 2015 started to be replaced by stagnation. Financial indicators of the company Twitter began to cause doubts among investors. Quarterly loss has been amounted to $ 132 million in the first quarter of 2014, when the revenue has reached only $ 250 million. In this case, analyzed social network needs to find a way out.
Another confirmation of the company’s fall can be a mass reduction of employees and huge drop in the value of shares. The minimal price of the share was marked on 11 Feb 2016. It was $14.31 (NYSE, 2016). The current price of share amounts $16.81 (NYSE), which is lower than the initial price in 2013 (NYSE, 2016). Thus, one can say that Twitter is in crisis now and needs huge changes in the strategy.
On the one hand, the company considers such perspective directions as implementation of new kinds of advertising and user-defined functions. The company also invests in other projects. For example, it was reported that Twitter management considered purchasing Soundcloud music service.
On the other hand, Twitter loses much Facebook in the context of communicative part. “Replay concept” does not make discussion as a clear and understandable. Direct Messages can be considered as a bad addition to the service that has no chance of mass use. Actually, there are no increase in the social interactions or they do not perform their function.
In my opinion, the most appropriate way to resolve above mentioned problem can be hard work with the content. It needs to create additional value of Twitter for all users through the improving of the communicative and content part of the service. Active monetization of Twitter can be realized through the partnership with event organizers, film and music producers, which can provide important content to the feed and a single center of notification. Another way is linked to the cooperation with the airports (for example, a system of free connection to the Twitter in world’s largest airports).
Conclusion
In conclusion ne can say that Twitter is in the crisis now. A huge decline in share price and staff reduction confirm this. At the same time, management of the company tries to find a way out. New additional options for users are developed and services for business are implemented. In this case, it can suppose that the price of the share will increase gradually at an early date. If I was a venture capitalist, I would invest in Twitter exactly now, when the price of the share is relatively low. At the same time, this investment is high-risk. Such a rapid growth of the company, which has been observed previously, most likely will not. In this case, investing in Twitter needs regular revision and forecasts.
References
Cross, M. (2011). Bloggerati, Twitterati: How Blogs and Twitter Are Transforming Popular Culture. Santa Barbara, CA: Praeger.
NYSE,. (2016). Twitter Inc: NYSE:TWTR quotes & news - Google Finance. Google.com. Retrieved 12 March 2016, from https://www.google.com/finance?cid=32086821185414
NYSE,. (2016). TWTR Interactive Stock Chart. Finance.. Finance.yahoo.com. Retrieved 12 March 2016, from http://finance.yahoo.com/echarts?s=TWTR+Interactive#{"showMfi":true,"range":"3mo","allowChartStacking":true}
Sue Burzynski, B. (2014). Twitter: social communication in the Twitter age. Journalism And Mass Communication Quarterly, 91 (4).
