The bottom line is, Twitter is losing money, even with its revenue growth, and in reality, the revenue growth isn’t really making a dent. And this could begin to weigh on the Twitter growth story.
Now that Jack Dorsey has been named full-time CEO and is allowed to also be CEO of Square (SQ), one of Jack’s first moves has been to trim 8% of Twitter’s staff with 336 layoffs.
While no one likes to see jobs lost, this was a badly needed move. Here is a chart from Statista showing the absurd employee growth at Twitter over the last few years.
OPPORTUNITY
Here it is, plain as can be. Twitter needs more users.
Twitter has competitors on its heels. Regardless of what the tweeps think about Facebook, if Mark Zuckerberg turns his attention to real-time communicase before Twitter masters it (and then owns it), friends Twitter is done. Facebook has 1.55 billion monthly average users and just crossed 1 billion daily active users. And let us not forget about other social media platforms getting awfully close to the real-time event driven mastery. We’re talking about Meerkat (a direct competitor to Periscope), Snapchat, and many, many others.
Twitter must see a jump in user growth from ‘Moments,’ Google search and Periscope (or some combination), even if it’s just circumstantial to keep the Twitter growth story going. Moments of course is brilliantly aimed at pushing Twitter’s only truly differentiated core competency forward — timely delivery of information and news. We know the argument for Periscope, which is simply that mobile video is crushing it and found out that large advertisers are happy to work within the confines of unscripted live feedback as long as they can reach millenials. And finally, now that tweets are indexed in Google search, triple in the number of people getting exposed to Twitter. The hope is that user growth will reignite.
It’s do or die for Twitter. It will grow users and it stock doubles or it will shrink and it’s stock plummets to unseen lows. That’s just it.
Thanks for reading.
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Twitter: Â @OphirGottlieb
Author has a long position in AAPLÂ at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
