Jack Dorsey hasn’t fixed the trouble with Twitter
Despite frequent strategy shifts, social media site still isn’t profitable
Julieanne Smolinski started hanging out on Twitter in 2009. She has 175,000 followers to whom she tells jokes and promotes her work as a journalist and as a television writer.
In February, she says she quit Twitter “the way you quit your favorite restaurant when it suffers an E.coli outbreak.”
The problem? The jerks who spewed hateful comments and the perverts who tweeted their genitalia at her.
After about a month of going cold turkey, Smolinski relented and signed back in to Twitter.
“I had stuff to annoyingly promote and missed the good parts — like jokes and news and my friends annoyingly promoting their stuff,” she says.
And that’s just the trouble with Twitter. Many people have a lovehate relationship with it. Or they have no relationship with it at all.
A pioneer in real-time social media, Twitter used to be one of the most buzzed-about companies in Silicon Valley. Even today, conversations that take place on the service, famous for its 140character limit, tap into the world’s pulse, be it the escalating feud between Donald Trump and Elizabeth Warren, protests on the streets of Ferguson, Mo., the congressional sit-in over gun control or the launch of Beyoncé’s Lem
onade album. Yet for years the social media service has struggled to keep the spotlight as competitors Facebook, Instagram and Snapchat encroached on its turf and spirit- ed away users.
One year ago, Twitter bet the company’s future on Jack Dorsey with the hope its visionary cofounder could do what his predecessors could not: find a new audience for the 10-year-old service and fix long-festering problems.
With frequent management and strategy shifts and paralyzing turmoil inside the company, Twitter has not altered its service
enough to appeal to the mainstream, stunting growth.
Increasing abuse on the service has alienated many, especially women.
Revenue slowed to 36% yearover-year in the first quarter, lighter than analysts expected, and second-quarter revenue guidance fell short of expectations. The company is still not profitable, sowing doubts about a Dorsey-led turnaround. Twitter, which once boasted a market value of nearly $40 billion, is now worth about a third of that. Twelve analysts have a buy or equivalent rating on the stock, 25 have a hold, six have sell ratings.
“Jack was from the original founding team. He knows Twitter better than anyone,” says Wedbush Securities analyst Michael Pachter, who has a neutral rating on the stock. “He was going to fix things. He proceeded to fix nothing.”
Dorsey, who splits his time between Twitter and digital payments company Square, replaced Dick Costolo as CEO last July on an interim basis. He was tapped to remain in the job in October.
With the cachet of a company founder who helped create the service, Dorsey swooped in with a broad mandate. His ambitious goal: to make Twitter a service everyone has to check to know what’s going on in the world. “No one is more determined than I am to see this company achieve its promise,” Dorsey said in October. Dorsey, through a representative, declined an interview request from USA TODAY.
Dorsey has set out five priorities for Twitter: improving the experience for veteran users and newcomers alike; increasing the focus on live video; taking extra care of content creators, celebrities and other “influencers”; making the service safer; and ramping up outreach to software developers.
Yet changes to the service on Dorsey’s watch — a news curation feature called Moments, changing its “favorite” star button to a “like” heart button, loosening the 140-character limit — have not persuaded enough people to give Twitter a try. Dorsey’s wins, such as securing the rights to the NFL’s digital package for Thurs
day Night Football, have been few and far between. The revolving door of the executive suite is still spinning with a series of major departures, and Dorsey slashed 8% of the workforce in October.
In the intensifying fight for eyeballs and ad dollars, flat growth has been the crushing blow. Facebook has 1.6 billion monthly active users, Instagram 500 million, and Snapchat 100 million daily active users. Twitter has stopped growing at about 310 million monthly active users.
And, in what is undoubtedly causing collective heartburn inside Twitter, Mark Zuckerberg is taking direct aim at Twitter with his new focus on “live” for Facebook.
“Investors hoped in getting rid of Dick Costolo they would get a doer, someone who would change things, reach out to non-users and get them to use the service,” but that has not happened, Pachter says. “Your mom knows if she joins Facebook, she will see pictures of your kid. She doesn’t know why she should join Twitter.”
Even some longtime users aren’t always sure why they are on Twitter anymore. When he was a journalist for a tech trade publication, Lee Pender, a marketing writer from Chelmsford, Mass., diligently tweeted to 650 followers. But the 140-character limit “encourages shouting instead of thoughtful conversation,” he says.