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

US Firms Concerned About China's New Cyber Regulations

New rules would require technology companies doing business in financial sector to hand over their source code, adopt Chinese encryption algorithms More

WHO Focus on Ebola Shifts to Ending Outbreak

Focus to be less on building facilities and more on efforts to find infected people, manage their cases, engage with communities and ensure proper burials More

US Scientist Who Conceived of Groundbreaking Laser Technology Dies

Charles Townes, Nobel laureate, laser co-creator paved way for other scientific discoveries: CDs, eye surgery, metal cutters to name a few technologies that rely on lasers 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.
Super Bowl Ads Compete for Eyes on TV, Webi
X
January 29, 2015 9:58 AM
Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video As Ground Shifts, Obama Reviews Middle East Strategy

The death of Saudi Arabia’s king, the collapse of a U.S.-friendly government in Yemen and a problematic relationship with Israel’s leadership are presenting a new set of complications for the Obama administration and its Middle East policy. Not only is the U.S. leader dealing with adversaries in Iran, the Islamic State and al-Qaida, but he is now juggling trouble with traditional allies, as White House correspondent Luis Ramirez reports.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8815
JPY
USD
117.85
GBP
USD
0.6581
CAD
USD
1.2420
INR
USD
61.404

Rates may not be current.