Twitter’s falling stock requires drastic action

Twitter’s stock hit a record low early in February 2016. Per Google Finance, its stock first hit a record low on January 17th, and it has continued to fall up to this article’s writing on February 8th, 7:59 PM (the date posted in the most recent NYSE fiscal reports).

This sort of change in stock prices is unheard of for any large social media website. There are multiple reasons why Twitter is in its current situation, and several have to do with the relationship between marketing needs, end users, and the company itself.

The most obvious problem Twitter faces, at least if you were to ask any of its end-users, is that it plans to implement an “algorithmic timeline” that will re-order tweets on the website, showing tweets that the website determines to be most relevant to the user first, rather than its current chronological order.

Some users have proposed alternatives, such as “Twitter Pro” paid memberships or expansion of the site’s existing “promoted Tweet” functionality, but most are simply dissatisfied with the change that has been proposed. CEO Jack Dorsey Tweeted that the algorithmic timeline feature will not be implemented “next week”, but the wording leaves many users anxious and continually dissatisfied.

Twitter has also suffered the loss of no less than four top executives, whom all left the company for different reasons. After losing its human resources lead, as well as the heads of product, of engineering, and of media, Twitter has temporarily filled these vacancies, with its CEO Jack Dorsey acting as head of engineering and product in the interim. But the fact that Twitter cannot act quickly to fill these positions, and that it lost them in the first place, may also be causing trepidation among stockholders.

Twitter has too many problems to approach concurrently. Nevertheless, a more measured approach to its current set of problems could cause catastrophic damage to the company’s presence. No single solution is available to Twitter from where it sits now, but a few lessons could be learned from the actions that led up to its crisis.

A large problem is that many of Twitter’s recent changes appeal to businesses rather than individuals. Social media websites are in a unique position in that they provide a marketing platform to other companies. Thus, Twitter’s “algorithmic timeline” feature makes sense when you consider that it would provide corporate Twitter accounts with greater mobility and outreach.

However, when consumers using Twitter may already be anxious about the website’s growing corporate side, affecting a change that transforms the experience of every user, including those who attempt to avoid advertising, threatens to shrink Twitter’s already shrinking user base.

Other concerns on the part of end users include that Twitter’s staff are poor at tackling harassment. Market leaders and consumers alike have been affected by the fact that, on Twitter, your best tool for dealing with users that invade space you are trying to use is the website’s block feature. Although the block feature itself has been praised as effective, addressing the site’s lack of support for chronically harassed users may contribute to further long-term decline.

Finally, although Twitter’s strengthening competition is not the website’s fault directly, it accounts for some of these problems and is affecting the site at a time where it has already become vulnerable.

Twitter’s largest issue in terms of stock market gain and loss, however, is the entropy of the site’s usability. As more tweets and retweets are made, and the user-base talks more (including about the issues chronicled above), it becomes more difficult to find tweets about multiple different issues, or tweets one has not already read, particularly if following more than 100 other users. In other words, the reverse chronological order that some users provide also creates noise that makes it harder for them to use the website.

Whether Twitter’s action is to simply improve the algorithms used to provide relevant and unobtrusive adjustments to the timeline, or to act on a new, riskier plan entirely, the usability of the website may be the issue Twitter needs to address most, for both businesses and individuals.

 

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