Twitter: 2017 worse than 2016?

Business 28 December, 2016

The nightmarish year of Twitter continues with the announcement of the resignation of two new executives, including the director of Technology, while the title agonizes on the stock market, that nobody wants to buy the social network, that polemics on “fake News “spoils its image and the prospects for growth are sluggish. How to raise the slope in 2017?
Until the end, 2016 will have been catastrophic for Twitter. On Tuesday, 27 December, Adam Messinger, the technology director of the social network, and Josh McFarland, vice president of product management, left the ship as a dozen executives since the beginning of the year, year.

A bad news more, sign that the panic is installed on board, while the title Twitter agonizes on the stock market and that society multiplies the missteps, like the “technical bug”, revealed last week, Which caused Twitter to over-estimate the number of views of its videos, and thus the price of its advertising space, in November and December. When it does not want to …

Growth too low and chaotic stock market

Twitter did not have a moment of respite in 2016. From the beginning of the year, the company was under pressure. Its CEO, the emblematic Jack Dorsey, was recalled in October 2015, four years after being ejected from the same post, with a clear mission: to recruit new users and to finally monetize the social network by valuing More effective treasure of its members data and advertising opportunities. In other words, ” repair broken windows and everything is confusing ,” as explained by Jack Dorsey in February.

For the moment, this mission is not fulfilled. And the more time passes, the more the markets despair. In one year, the Twitter action lost 28.7% of its value, to 16.50 dollars. It has even fallen by 60.4% since its IPO in November 2013, when the stock traded at 41.65 dollars. At the moment, it is closer to the historic low of 14.02 dollars, recorded on 10 June. Proof that investor confidence in Twitter is at its lowest.

And for good reason: the failure of growth, identified from the beginning of 2015 as the main problem of the company, has not been resolved. In one year, Twitter grew from 305 to 317 million active users per month, an increase of only 3%. By comparison, Facebook, which nevertheless federates 1.79 billion friends, has expanded its user base by 16% over one year. Other popular social networks (Messenger, WhatsApp, Instagram, Snapchat) all did better in 2016.

An erratic strategy
However, the blue bird did not sit idle by the crisis. Many measures, sometimes radical, have been put in place to simplify the social network, develop video, promote the engagement of Internet users and increase the advertising opportunities for advertisers. But their inefficiency has given the impression of an erratic strategy, as if Twitter threw bottles into the sea without a global vision.

In 2016, Twitter changed a lot. To “give air” to messages , 140 characters of the dogma has been sacrificed, like that of the ante-chronological flow, seeing the latest tweets display in real time on the “timeline” of the user. Now, Twitter puts forward “interesting” content selected by algorithms. Even causing the dissatisfaction of “historical” users.

Twitter also launched in the video broadcast of American football matches and presidential debates. It has built its Periscope application, promising but still confidential and rotten by the controversies in the news feed. Numerous tests and programs have been conducted. Finally, Twitter decided to do housework in its agonizing and expensive services. Thus, in late October, the social network announced the end of the mythical app Vine , that advertises looped videos of six seconds. But the Vine case is a good indicator of Jack Dorsey’s strategic mistakes. Before the emotion of users and expressions of interest from a dozen potential buyers , Twitter finally decided not to kill Vine, but to turn it into a tool for social network: users can always make short videos Of six seconds, but they will now publish them on Twitter.

Social plan, departures in chaos … and no buyer
The rumors of a Twitter release, to allow it to benefit from the support of a larger group or bring a breath of fresh air in cash, circulated since the end of 2015. The company had them always Dismissed with a backhand. But we had to face the obvious: since growth is lastingly sluggish and Twitter remains deficit, we must try the option of redemption. ” I do not see how the company could get better over the next two years without fresh blood” , said Chris Sacca, one of the original shareholders in early October.

Strengthened by its status as a real-time media platform, Internet platform of reference, Twitter first believed in position of strength. The social network wanted to sell for $ 30 billion, while it was valued between $ 18 billion and $ 20 billion. Salesforce, Google, Disney, Apple and Microsoft have all expressed interest in him . But everyone has declined. At the end of October, Twitter was no longer interested in anyone.

So we must move forward, continue the restructuring of the company. Either to continue, as best he could, to go it alone, or to make himself more desirable in the eyes of potential buyers. Thus, on 27 October, the company announced a new social plan affecting 9% of its workforce, more than 300 employees.

” We can still boost growth by improving the heart of the service. We have a clear plan and conduct the necessary changes to position Twitter on the path to long-term growth” , stated Jack Dorsey.
But his reassuring talk convinced neither the markets nor the troops in-house. 2016 was marked by an unprecedented wave of departures from top management. In January, Jack Dorsey announced the departure of four of the nine members of its management team , including vice presidents Kevin Weil (who handled products), Katie Stanton (media relations), Brian Schipper (human resources) and Alex Roetter (engineering). In November, Jack Dorsey lost his right arm, Operational Director Adam Bain. The last two departures of Tuesday, December 27, Adam Messinger, director of technology, and Josh McFarland, vice president of product management, take another hard blow.

2017, year of bounce or plunge?
Twitter thus ends 2016 in a position even more delicate than twelve months earlier. But the new chief financial officer, Antony Noto, thinks that the efforts of the last two years (simplification of the newswire, video development, better services to companies, increased advertising revenues) will bear fruit in 2017. It even risks to predict the onset of profits: ” We won in discipline in how we manage our business, we want things profitable in 2017 ,” he said.

Sure enough, everything is not black for Twitter. In the third quarter of 2016, revenues grew more than expected ($ 616 million, while analysts were expecting $ 610 million), and losses decreased – to $ 103 million from $ 132 million a year earlier . Another source of satisfaction is that the platform better monetizes its audience with advertisers than in 2015. The fourth quarter results, which will be revealed in January, will provide valuable insight into the group’s ability to take the lead in 2017 … or not.

2017: Twitter and Facebook face the challenge of “fake news” and hateful content

To make matters worse, Twitter spent the year 2016 under fire from critics, as its Facebook competitor. Both media networks have been criticized for their lack of involvement in the fight against radicalization online (Twitter and Facebook are platforms used by terrorists to spread their propaganda or to recruit), and the viral spread of “False news”, which would have helped Donald Trump to win.

For example, in January, an American woman whose husband died as a result of an attack claimed by the Islamic state filed a complaint against Twitter, saying that “the exponential growth of the AR in recent years would not have been Possible without [him] “. Politicians, right and left, have denounced the responsibility of social networks in the fight against radicalization. So in April, Twitter, Facebook, YouTube and Microsoft signed a “Code of Conduct” that urged them to remove hateful content from the Web in less than twenty-four hours. A code that they have obviously not respected, since the European Commission pointed to their ineffectiveness at the beginning of December, threatening to resort to the weapon of the legislation.

Finally, articles propagating lies made viral through social networks, have earned Twitter and Facebook severe criticism. Especially because these “false news” contribute to propagate the populist speeches based on the hatred of the other. In September, Facebook and Twitter joined the “First Draft Coalition”, a fact-checking organization supported by Google to verify suspicious information and improve the quality of social media info. The beginning of an awareness. As media intermediaries and sources of information, Twitter and Facebook must assume their responsibilities. A new challenge for 2017, when in France, the presidential election.