[responsive][/responsive]Millions of people use Twitter. And uncountable numbers more are exposed to Twitter every day in mainstream news feeds and online articles. Plus, they’ve figured out how to make money with the darn thing, with ad revenue for the most recent quarter at $320 million.
So why isn’t Twitter the darling of Wall Street?
According to Seth Fiegerman in Mashable, it’s because investors are focusing on the slow-down in new users rather than ad revenue and other positive indicators. In other words, they aren’t as huge as they should be by now.
“Three months after the IPO, Twitter released its first earnings report as a public company,” Fiegerman writes. “While it beat Wall Street estimates for earnings and revenue, investors focused on the slowing user growth. During the final quarter of 2013, when everyone seemed to be talking about Twitter, the social network added just 9 million active users globally and only 1 million new users in the U.S.”
He says the problem stems from a lack of visionary leadership that will lead to future growth.
“What Twitter is missing, according to multiple employees we spoke with, is a firm understanding of its success and a clear plan to build on that success without undermining it,” Fiegerman writes.
As one former employee put it, “No one really knows what makes it successful so there is a perpetual fear of changing it.”
Should Twitter focus on private messaging, or on a curated news feed? Should it be easier for new users to adopt, at the risk of breaking what is working well for established users? Should they…gasp…become more like Facebook? These are the questions that Twitter is struggling with, according to Fiegerman.
“Unlike with Facebook or Google, the CEO of Twitter isn’t one of the founders nor does he have a controlling stake in the company. While employees we spoke with characterize Costolo as smart and likable, they stress that Twitter is handicapped by not having a founder with a vision for the product and the authority to see it through.”
Still, shouldn’t “quite successful” be successful enough? Can Wall Street learn to love the little blue bird without a billion users behind it? Fiegerman thinks so.
“At some point, Twitter’s execs and investors may have to confront the very real possibility that it’s destined to be a service with several hundred million users and respectable revenue,” he writes. “But first, execs and investors would have to acknowledge that Costolo is wrong when he says Twitter will one day have ‘the largest audience in the world.’”
Maybe a few hundred million is enough?