If you are not aware of the recent controversy surrounding Twitter (Twitter, Inc. 18,23 +0,28 +1,56%), rumors surfaced that the social media company was planning to use a timeline algorithm, similar to the Facebook News Feed. As the news got out, the hashtag #RIPTwitter was born in reaction. What does this mean for the platform?
It is known, Twitter was beta testing an algorithm similar to Facebook with a small group of users. Jack Dorsey, co-founder and CEO, was also on the record stating he had a vision of making the social media platform more like Facebook. However, the harsh reaction from Twitter users prompted Dorsey to announce there is no planned change.
Hello Twitter! Regarding #RIPTwitter: I want you all to know we’re always listening. We never planned to reorder timelines next week.— Jack (@jack) February 6, 2016
Was this a the truth or was it Twitter backing down? The reality is the company is in trouble attracting new users to the platform, but it seems that they have been alienating existing users in the process. Dorsey has pushed his vision too far, and has finally started to see that “Twitter is live. Twitter is real-time. Twitter is about who & what you follow, ” as he also tweeted.
The problem here is that Dorsey and company have been listening to Wall Street, and not Main Street. Twitter’s stock price has plummeted as the company has had trouble attracting new, active users. Wall Street is not filled with social media experts. So, when they saw the company struggling, they naturally started to demand Twitter do what is known to work… and Facebook works.
The problem here is that it is not an either or. Most active Twitter users are also Facebook users. The two platforms are utilized for different purposes. Dorsey should have worked to make Twitter the best version of itself, but he would rather play Monkey See, Monkey Do.
As a result of all this failure, Twitter’s stock has been hammered. The drop initially sparked rumors of a takeover from Google, Facebook, Apple, or even a private equity firm. Since none have stepped up, some have started to speculate if the stock could hit zero.
Twitter is set to announce 4th Quarter 2015 numbers in 2 days, February 10. Don’t expect an improvement with user growth. In fact, I would almost expect a decline in active users. What does this mean for Twitter? Who knows!
Six months ago, no one was predicting Twitter stock would drop this low. My own predictions were that the stock would have a bottom of $17 and then there would be a takeover attempt. That did not happen, and I am not yet sure why. The only thing I am sure of is Twitter is in trouble.