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

Turkey: No Ransom Paid for Release of Hostages Held by IS Militants

President Erdogan hails release of hostages as diplomatic success but declines to be drawn on whether their release freed Ankara's hand to take more active stance against insurgents More

Audio Sierra Leone Ends Ebola Lockdown

Health ministry says it has reached 75 percent of its target of visiting 1.5 million homes to locate infected, educate population about virus More

US Pivot to Asia Demands Delicate Balancing Act

As tumult in Middle East distracts Obama administration, efforts to shift American focus eastward appear threatened 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.
Natural Gas Export Plan Divides Maryland Towni
X
Deborah Block
September 21, 2014 2:12 PM
A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Alibaba Shares Soar in First Day of Trading

China's biggest online retailer hit the market Friday -- with its share price soaring on the New York Stock Exchange. The shares were priced at $68, but trading stalled at the opening, as sellers held onto their shares, waiting for buyers to bid up the price. More on the world's biggest initial public offering from VOA’s Bernard Shusman in New York.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7768
JPY
USD
108.84
GBP
USD
0.6124
CAD
USD
1.0999
INR
USD
61.042

Rates may not be current.