Over and Out for Twitter? Maybe Not
It’s been a tumultuous few months in the world of Twitter, and definitely not one which can be summed up in 140 characters. There’s been takeover threats, financial worries, job losses and the closure of part of the business. It would be fair to say that Twitter’s staff are definitely hoping for a calmer 2017. Let’s sum up some of the key events which our favourite short-form social media platform has seen in 2016.
When Twitter’s shares were released onto the stock markets in 2013, each share was worth $26. They peaked at $73 not long afterwards, but the bubble burst and, slowly but surely, their value has been falling until they hit just under $19 at the end of September. This bargain basement price piqued the interest of several investors, with some big names like IBM and Disney apparently around the table for negotiations. Even Google was rumoured to be interested, and you don’t get a lot bigger than that. However, when it came to the crunch, it seemed that the only party with something to offer was Salesforce, an American cloud computing company.
The problem Twitter had was that it wasn’t showing the growth which many of the big players would demand for a company with its profile. For the last couple of years, there’s not really been any growth in active user numbers. Sales targets weren’t met and, despite the return of original CEO Jack Dorsey, there hasn’t been any sort of improvement.
Negative news and the falling share price saw everyone including Salesforce walk away from negotiations. There was no definitive reason given – their CEO, Marc Benioff, simply said that it wasn’t right for them. Rumour is that some of Salesforce’s own backers were not happy with the prospect of a takeover, putting a lid on the matter once and for all. The result of Salesforce’s departure from a Twitter takeover? Another 5% wiped off the share price for Twitter.
They may be down, but Twitter’s staff are working hard to prove that they’re not out. They’re going all out to get the attention of new users and advertisers to help plug the $138 million hole in their business. What better motivator than to know that your employment status hinges on it? As we’ve seen in the UK, a lack of money quite often leads to mandatory redundancies. Bloomberg reports that 8% of Twitter’s workforce are about to lose their jobs, which should be about 300 people, although Bloomberg did say that no figures are guaranteed at this point. It is, however, acknowledged that Twitter is finding it harder and harder to compete with companies like Google for talent which could make a difference to the future development of the platform.
The closure of Vine has certainly been better publicised than Twitter’s financial woes. In fact, for many people, Vine’s closure was the first they heard of Twitter’s difficulties. Vine has been on the go since 2013. For the uninitiated, it was Twitter for video – short, six-second clips which you could share on Twitter. Embraced by the creative community, even young pop star Shawn Mendes got his foot in the door thanks to Vine. Existing Vine customers have been reassured by the company’s statement that there will be no immediate changes and that they’ll be taking Vine videos down “the right way”. Any media currently hosted by Vine is going nowhere, and users have got time to find an alternative platform.
As with its parent company, though, Vine was not a profitable platform. It had stiff competition from YouTube and Snapchat, which were both infinitely more profitable and without the limits Vine slapped on its customers. It made a good springboard to launch a career from, but it seemed that many of its starlets, including the aforementioned Shawn Mendes, moved away to other platforms once they hit the big time.
With so much bad news, you may be starting to conclude that this is the end of the line for Twitter. However, all it seems to have done is strengthened the resolve of Twitter’s people to keep fighting for their social media platform. It knows that it’s currently unprofitable and is working very hard to help its staff control the company’s spending, or at least curb spending in line with sales. They’re more determined than ever to keep their company afloat, and they’re going to do it with or without Salesforce, Disney and Google. Who knows – there may be something bigger and better ahead for Twitter and its users in 2017!