Not even Trump’s Twitter habit can help company
In just 140 characters or less on Twitter, President-elect Donald Trump has demonstrated that he can wipe out billions of dollars in market value of a company that crosses him. But what seems beyond his power is boosting the bottom line of the service he’s so fond of using.
The San Francisco company has so far failed to exploit the enormous impact of serving as the almost-exclusive mouthpiece for the soon-to-be leader of the free world. If anything, Trump’s Twitter addiction shines an even harsher spotlight on the company’s impotence in generating profit or significantly expanding its user base.
If the most powerful man on Earth conducts market-moving policy on Twitter — the grandest sort of celebrity endorsement there is — and if that can’t help the company make money, then who can?
Since Trump launched his once-quixotic campaign for president in July 2015, Twitter’s stock price has actually fallen 52 percent; it closed Tuesday at $17.37.
But surely, all of the media talk about Trump tweets means people are flocking to Twitter, right? Not really. At the end of September, the company reported 317 million actively monthly users, just a 3.2 percent gain from the previous September. By contrast, in the same time period, Facebook increased its number of users by 15.7 percent to 1.78 billion.
The lack of a Trump jump among users demonstrates the inherent flaws in Twitter’s business model — mainly the lack of exclusivity, said Neil Doshi, senior Internet analyst with Mizuho Securities USA.
Anyone can see Trump’s tweets, especially when every single media outlet reports on them. And 140 characters doesn’t take up much space in print, online or on television.
“You can get his tweets anywhere,” Doshi said. “Media outlets will show it in real time. It just goes to show you that Twitter had long ago given away its most valuable asset. It’s not a meaningful vehicle for monetization.”
Exclusivity is important.
Television networks make money by charging advertisers rates based on viewership. It certainly helps when you are the only channel showcasing an event.
During the first Republican debate in Cleveland in August, Fox News attracted a whopping 24 million viewers — in 2012, the largest audience for such a debate was 7.1 million. Knowing this, Trump consistently bragged about how he made networks a lot of money by boosting ratings. He was not wrong.
Of course, people could follow quips and commentary about the debate on Twitter, and plenty did. But important events like presidential debates are best played out on television, not 140 characters at a time.
Which brings us to to another flaw in Twitter. The reasons Trump likes to use it — its brevity and forum for unfettered speech — are the very reasons that the company can’t exploit his popularity.
“Whether Trump says something good or bad, reasonable or outrageous, and whether users like Trump or not, they may find a reason to engage with him through replies or retweets as long as he is actively using the platform, all of which means more engagement,” said Pinar Yildirim, an assistant professor of marketing with the University of Pennsylvania’s Wharton School.
But Trump does not really engage with his audience. His modus operandi is to tweet something and then let everyone else talk about it.
Trump also has a gift — if you can call it that — for bringing out the worst in people. Whether we’re speaking about his critics, who bash everything he says or does, or his supporters, who bash everything his critics say or do.
The downside, Yildirim said, is when Trump supporters or opponents become so dominant that those with opposing views feel alienated and they become less engaged.
Critics have already chastised Twitter for not doing enough to battle hate speech and protect people from online abuse. Throw in some of Trump’s more vocal and vicious followers, and you create an environment where racism, misogyny and plain cruelty can thrive.
That’s not the kind of business most companies like to brag about, especially when they want to woo advertisers. Twitter seems to have recognized this, making deals with the likes of the National Football League to broadcast football games and other, more advertiser-friendly fare, on mobile apps and Internetconnected TVs. But those deals can’t change the short, text-focused nature of Twitter’s core service. It doesn’t seem likely that Trump would arrange to stream White House press briefings on Twitter, as fond as he is of tweeting.
Twitter is not alone in facing this problem. Plenty of people use the online discussion service Reddit to chat about news. But Reddit can’t find a way to make money, because it, too, suffers from severe trolling.
There are certainly trolls on Facebook. But users can better control their experience. And the social network is better known as a place where friends and family swap news, videos and photos than one where you exchange taunts and insults with complete strangers.
“It doesn’t take a genius to connect the dots of a rise in abuse on Twitter — both its quantity and savagery,” Umair Haque, director of Havas Media Labs, recently wrote in the Harvard Business Review. “Twitter’s central problem is low-quality interaction. Today, we live in a world of strikingly dismally low-quality interactions. Can you remember the last time you really enjoyed going to a big-box store, bank, hospital?”
Trump may enjoy broadcasting his views on Twitter. He doesn’t care whether it makes anyone else want to use the service. There’s Twitter’s problem — in less than 140 characters.