Feb 112016

Poor Twitter. Today’s earnings report showed what everyone knew, that its user growth has stalled with the number of active participants – Monthly Active Users as the company calls them – didn’t grow in the last quarter and is only up nine percent on the previous year.

The good news for shareholders is advertising revenue grew 48% with both US and international markets showing strong increases. Despite user growth flatlining the company is still on track to becoming profitable.

As Farhad Manjoo argues at the New York Times, maybe the service needs to focus on more modest ambitions. Its dreams of competing with Facebook or growing like Google are never going to be achieved.

We’ve argued at this blog for a year that Twitter’s management and investors should accept the market’s expectations of the business were too lofty and while there’s no reason the company can’t be profitable, it’s not going to be a massive river of gold like Google.

There’s nothing wrong with being a healthy billion dollar business. The risk for Twitter is the greed and ego of investors, founders and shareholders could condemn the company as it tries to meet impossible expectations.

Jan 262016

A few days ago we looked at how sports organisations such as the Australian Open tennis tournament are increasingly treating their data as an asset almost as valuable as broadcasting rights.

Now Facebook has entered the space with its own Stadiums sports data service that it hopes to become an online centre for fans following major events.

How enthusiastic sports organisations will be in sharing their data and audiences with the social media service remains to be seen.

Sports have been a priority of the social media services in their quest to attract audiences, however unlike television broadcasters Twitter, Google Plus and Facebook have found their cosying up to contests and stars has been less than successful.

It may be statistics are what’s needed to attract fans and certainly Facebook is well placed to be a destination for fans however it is early days for social media and the model that works is yet to be found.


Jan 072016

Twitter is in trouble, its share price has fallen 70% in the past two years and the service is not gaining new users. To halt the stagnation, CEO Jack Dorsey is reportedly considering ditching the 140 character limit.

Commentator Josh Bernoff suggests playing with character limits will do little to address Twitter’s lack of momentum which is almost certainly correct given the underlying problems at the service.

The one most desired feature by Twitter users is the ability to edit their posts, although the New York Times points out this may not be a good thing, another popular change would be for the service to crack down on abusive behaviour.

Stagnant management

It seems however that Twitter’s management can’t make those changes and this is understandable given the company’s executives not understanding how the service is used and their desperate obsession to justifying its stock valuation which, despite falling 70% over the past two years, is still $14 billion.

Justifying that stock valuation with no clear path to monetising the service is a paralysing problem which means other useful changes aren’t being made while the company still embarrassingly cosies up to sports, pop and movie stars in the hope their fame will bring advertiser dollars to the platform.

For Twitter the solution is to accept they aren’t a fourteen billion dollar company which would take the pressure off the executive team to find unsustainable ways to justify that valuation and instead focus management’s efforts on improving the user experience.

Making Twitter useful

To make the service more useful, management has to understand how Twitter is used which means finding experienced and capable leaders who also use the service.

Adding features that allow users to make some changes to tweets and lists would be a start and clamping down on the bullies, trolls and frauds to make it more friendly to new entrants would be a start. Creating an easy way for new users to find useful information would also help engagement and retention.

The most important task though is finding executives who actually use Twitter and have an understanding of social media instead of hiring from the tech, advertising and broadcasting industries without any regard of whether those individuals have ever used the service.

Twitter is a valuable service but it’s dying as management play games. If it is to survive, accepting it isn’t as big as it wants to be and finding leaders who understand why its users find it so useful is essential.

Dec 222015
Local village

Before the web came along, advertising for the local plumber or hairdresser was just a matter of placing an ad in the local newspaper and a listing in the Yellow Pages. Then the internet and smartphones swamped those channels.

One of the greatest missed opportunities has been small business online advertising. With the demise of phone directories, particularly the Yellow Pages, it’s been hard, time consuming and expensive for smaller traders to cut through the online noise.

This market should have been Google’s for the taking however the local search platform has been drifting for years in the face of company apathy, mindless bureaucracy and silly name changes to fit in with the Google Plus distraction.

While Facebook has been playing in the local business space for a while they are now ramping up another service with a new site for local services search.

TechCrunch reports Facebook are experimenting with the local search function and while it isn’t anywhere near as comprehensive as Google’s at present the rich data the social media service has been able to harvest could well make it a far more useful tool.

However it’s not Facebook’s first attempt and Apple too has been playing in this space albeit with little traction.

If Facebook or Apple does usurp Google, the search engine giant will only have itself to blame for missing the opportunity as it was distracted by loss making ventures while letting potentially lucrative services pass.

The local business search market should be a lucrative opportunity for the business that gets it right. It may well be that all the big tech giants are unable to make this market work.

Oct 242015

Thought of the day. We’re in at point of change in social and consumer behaviour similar to that of the late 1950s.

Sixty years ago the drivers were; the first baby boomers entering their teenage years, the rise of television, an era of accessible and cheap energy, along with rising incomes from the post World War II reconstruction.

Today the drivers are; the baby boomers entering retirement, the rise of the internet, an era of abundant and easily accessible data, the rise of the internet along with stagnant living standards following the late 20th Century credit orgy.

Your thoughts on where this goes?

Oct 232015

Twitter’s new Executive Chairman finds the service intimidating to use reports the Wall Street Journal.

With a distracted CEO juggling the Initial Public Offering of his other business, it’s hard to see how Twitter is going to get the focused management and supervision it desperately needs to maintain its valuation.


Oct 132015
Instagram 3.5 - Photo Maps

A constant with social media companies is their fascination with celebrities. At the first opportunity they’ll trash their credibility and burn their credibility with users to curry favour with a b-list celebrity.

The most damaging example of this was Google making an exception of its ‘real names’ policy for celebrity Google+ accounts. In making an exception for pop stars, the company destroyed any argument it had for insisting users had to use their birth names in order to use their service.

In their quest to be relevant Twitter’s management has consistently made itself look like a simpering bunch of star struck groupies in pandering to celebrities. Which they’ve done one again with their Moments service as Josh Dickson point out.

Probably one of the worst examples though is the story of Andrés Iniesta and his Instagram account.

One morning last week Iniesta found his Instagram account had been suspended for breaching the ‘terms of use.’

Iniesta was baffled and couldn’t find how he’s breached the terms, three times he tried to reach out to Instagram and was ignored. In the meantime his Instagram account started posting pictures of his namesake, a Spanish soccer star.

Only after posting his story on Medium did Iniesta get a response – and an apology – from Instagram’s PR people.

It turned out the only breach Iniesta had committed was to be born with the same name as a FC Barcelona star.

Despite having not actually breached Instagram’s terms and conditions, Iniesta had his account taken with no notice and certainly no process.

For the thousands of ‘social media influencers’ and the brands trying to use these service as channels to connect to a fragmented audience Instagram’s actions are a reminder that all their efforts are built on sand – years of work can be wiped out at the whim of a faceless and unaccountable bureaucrat.

Ultimately it’s the social media services who lose the most from their high handed treatment of their users, as it becomes apparent to both advertisers and ordinary account holders that everything they post is impermanent then the trust in the service is gone.

The greatest hypocrites in today’s business world are the social media services – Twitter, Facebook and a host of others which want you to share your intimate details with them for their own commercial use.

As Andrés Iniesta found, the social media service’s commitment to openness and transparency vanishes the moment a user has a problem.

For celebrities, or those well-connected, no such problems exist. One instant message or phone call to their contact within Facebook, Twitter or Google and the problem is fixed.

Ultimately though that insider game and obsession with celebrity will undo the social media services. For the moment though, all their pretences of being identity services or journals of records should be taken with a lot of scepticism.