Twitter Quitters Highlight Problem In Company’s Quest To Go Mainstream

This article (http://www.huffingtonpost.com/2013/10/20/twitter-quitters-go-mainstream_n_4131459.html?utm_hp_ref=social-media) highlights a risk for investors as Twitter Inc marches towards this year’s most anticipated initial public offering in the United States, expected to begin trading on the New York Stock Exchange in mid-November.

Twitter VS. Facebook

1. Quitters:

According to a Reuters/Ipsos poll, 36 percent of 1,067 people who have joined Twitter say they do not use it, and 7 percent have shut their account.

In comparison, only 7 percent of 2,449 Facebook members report not using the online social network, and 5 percent have shut down their account.

2. Active Users (people who access the service at least once a month)

Twitter reported it had 232 million active users at the end of September, up 6.1 percent from the end of June. Twitter’s quarter-over-quarter growth in active users has not exceeded 11 percent since June 2012.

When Facebook was a similar size, its active users were increasing by more than 20 percent every quarter, and it was not until the social network neared the half-a-billion member mark that its user growth decelerated to 12 percent.

3. Revenue:

Twitter’s revenue in the third quarter more than doubled from the year before to $168.6 million, while its net loss tripled to $64.6 million. Analysts expect Facebook, which is due to report its third-quarter results later this month, to bring in $1.9 billion in quarterly revenue.

Reasons of Quitting

  • Lack of friends on the service;
  • Difficulty understanding how to use it;
  • Do not find it that interesting or useful;
  • Do not understand what to use Twitter for;

Since Twitter aims to become the “fabric of every communication in the world” and to eventually reach every person on the planet, it has taken steps to help new members since 2011, such as: introduced a new “Discover” section to highlight the most popular discussion topics based on a person’s location and interests, simplified some features and rolled out new tools that embed photos and videos directly in a person’s tweet stream, etc.

However these steps did not make a difference. The data showed above would seem to imply that the ultimate revenue potential for this company is less than for Facebook.

Questions: 1. Do you agree or disagree that the growth-opportunities of Twitter are less than that of Facebook?      2. Some analysts claimed that Twitter is a niche medium, not for everyone, so their appeal would never be as broad as Facebook. How do you think?

–Ya Wang

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