News / Economy

Twitter Quitters Dog IPO

A news ticker in New York's Times Square announces an initial public offering for Twitter Inc., Sep. 13, 2013.
A news ticker in New York's Times Square announces an initial public offering for Twitter Inc., Sep. 13, 2013.
Reuters
— Retired schoolteacher Donald Hovasse signed up for Twitter about a year ago at the urging of his daughter. He lost interest after trying the service a few times and finding lots of celebrities but few of his friends using the online social network.
 
“I didn't really get the point of it at all,” said the Las Vegas resident. “Most of them were people I wasn't interested in hearing what they had to say anyway.” He said, however, that he does check Facebook every day to see what his friends are up to.
 
Hovasse's experience 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.
 
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 say they have shut their account. The online survey, conducted Oct. 11 to 18, has a credibility interval, a measure of its accuracy, of plus or minus 3.4 percentage points.
 
In comparison, only 7 percent of 2,449 Facebook  members report not using the online social network, and 5 percent say they have shut down their account. The results have a credibility interval of 2.3 percent.
 
People who have given up on Twitter cite a variety of reasons, from lack of friends on the service to difficulty understanding how to use it. Twitter declined to comment for this story, saying it is in a quiet period ahead of its IPO.
 
Twitter's attrition rate highlights a challenge that has dogged the online messaging site over the years: while it has managed to enlist many high-profile and avid users, from the Pope to President Barack Obama, Twitter has yet to go truly mainstream in the way Facebook has.
 
Convincing ordinary people to think of Twitter as an indispensable part of their lives is key to the company's ability to attract advertisers and generate a profit.
 
Twitter reported it had 232 million “active” users - people who access the service at least once a month - 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.
 
“Twitter is a great service, it's still got growth in front of it. But in my opinion, I would say the opportunities are less than that of Facebook, and it has to be valued appropriately,” said Dan Niles, chief investment officer of tech-focused hedge fund firm AlphaOne Capital Partners.
 
“The data would seem to imply that the ultimate revenue potential for this company is less than for Facebook,” Niles said, referring to Twitter's number of active users.
 
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.

Quitters
 
Twitter aims to become the “fabric of every communication in the world” and to eventually reach every person on the planet, Chief Executive Dick Costolo has said. Still, Twitter acknowledged in its IPO prospectus that “new users may initially find our product confusing.”
 
The company prides itself on staying true to its roots: it lets people send 140-character messages and does not pack in scads of extraneous functions. Since its inception, Twitter has resisted overtly manipulating how people use its platform, instead preferring conventions to be formed organically.
 
As a result, new users often find it initially difficult to grasp how discussions ebb and flow, complaining that features such as the “hashtags” that group Tweets by topic, abbreviations for basic functions (for instance, RT for retweet) and shortened Web links, are geared towards a technologically-savvy crowd.
 
“The average person that's coming on here, they're still baffled by it,” said Larry Cornett, a former executive at Yahoo Inc and designer at Apple Inc, who now runs product strategy and design consulting firm Brilliant Forge.
 
“If they want the mass adoption and that daily engagement, they have to make it really easy for people to consume.”
 
According to the Reuters/Ipsos poll, 38 percent of 2,217 people who do not use Twitter said they did not find it that interesting or useful. Thirteen percent said they do not understand what to use Twitter for. The results have a credibility interval of 2.4 percent.
 
Twitter has taken steps to help new members. In December 2011, it introduced a new “Discover” section to highlight the most popular discussion topics based on a person's location and interests.
 
The company also simplified some features and rolled out new tools that embed photos and videos directly in a person's tweet stream, making for a richer and easier-to-use experience.
 
These changes may mean that Twitter's retention rate for the past several months is better than its overall retention rate, which includes people who joined years ago, say analysts.
 
Brian Wieser, an analyst with Pivotal Research Group, said Twitter's current user base is already big enough to be valuable to advertisers. Investors need to get more comfortable with the idea that Twitter is not for everyone, he said.
 
“The practical matter is that this is a niche medium,” he said. “Their appeal, they will never be as broad as Facebook.”

You May Like

Mali's Female Basketball Players Rebound After Islamist Occupation

Islamist extremists ruled northern Mali for most of 2012, imposing strict Sharia law, and now some 18 months later, the region is slowly getting back on its feet More

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

Many Chinese-made products go unsold, for now, with numerous Vietnamese consumers still angry over recent dispute More

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

This forum has been closed.
Comment Sorting
Comments
     
by: Fascist Rule from: USA
October 22, 2013 9:47 AM
Fascism is rearing its ugly head, as the Global Elites grovel at making all of us poor.Did you know that the U.S. national debt has increased by more than a trillion dollars in just over 12 months? On September 30th, 2012 the U.S. national debt was sitting at$16,066,241,407,385.89. Today, it is up to $17,075,590,107,963.57.

These numbers come directly from official U.S. government websites and can easily be verified. For a long time the national debt was stuck at just less than 16.7 trillion dollars because of the debt ceiling fight, but now that the debt ceiling crisis has been delayed for a few months the national debt is soaring once again. In fact, just one day after the deal in Congress was reached, the U.S. national debt rose by an astounding 328 billion dollars. In the blink of an eye we shattered the 17 trillion dollar mark with no end in sight. We are stealing about $100,000,000 from our children and our grandchildren every single hour of every single day. This goes on 24 hours a day, month after month, year after year without any interruption.

Over the past five years, the U.S. government has been on the greatest debt binge in history. Unfortunately, most Americans don’t realize just how bad things have gotten because the true budget deficit numbers are not reported on the news.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.