Twitter may never be as big as Facebook or Google, but if it defines a new way to market and build relationships for businesses, it will have a profitable and successful lifespan.
Twitter’s shares look to stage another swan dive Wednesday morning as investors continue to focus on the only disappointing piece of data in its first-quarter earnings report: continued anemic user growth.
Higher growth would be better, of course. But the clear implication of an after-hours selloff of 11%, to a little under $38 a share, is that Twitter needs to be more like Facebook: Only by growing like crazy, the thinking goes-Facebook-crazy, that is-can Twitter build the next great online media business.
On that point, investors are utterly wrong. If anything, Twitter needs to make sure it doesn’t try to be more like Facebook.
Now, that could well mean that Twitter will never grow to Facebook’s size. That would indeed be disappointing to many. When investors bought into Twitter’s initial public offering last year and ultimately drove shares to a closing high of $73.31 the day after Christmas, that potential is clearly what they were buying.
But that’s their mistake. It’s no knock on Twitter as a potentially very successful advertising medium. After all, ad sales more than doubled in the quarter. And with a number of still-nascent ad products waiting in the wings, there’s little reason to think that growth-you know, revenue growth-won’t continue or even accelerate.
The problem is that most investors and advertisers alike still don’t understand that Twitter isn’t Facebook and never will be-and that that may very well be a good thing. Craig Elimeliah, a VP and director of creative technology at the ad agency RAPP, said in an interview that most people don’t understand the true reach of Twitter, which extends well beyond the Twitter app and website to television, news sites, blogs, and even our culture at large.
“The engagement of a person on Facebook is worth so much less than on Twitter,” he says, because Twitter offers in-the-moment context that Facebook can’t. “I don’t think Twitter is meant to have a billion [actively tweeting] users. It’s meant for a highly vocal, highly engaged but smaller group.
Read more from the source: Forbes