Twitter is a 'mess' that even President-elect Donald Trump can't save. Photo / AP
Twitter is a 'mess' that even President-elect Donald Trump can't save. Photo / AP
So far this month, the man who will become the next president of the United States has turned to Twitter to announce his pick for secretary of state, declare Saturday Night Live "unwatchable" and to defend a phone call with Taiwan's president.
His tweets have sent Lockheed Martin's stock price plunging, dredged up conflicts with China and led to the harassment of labor leaders, reporters and others. Twitter, he has said, is "a modern-day form of communication" -- and he has 34,100 Tweets of his own to prove it.
"There is no doubt that Donald Trump has become Twitter's most powerful ambassador," said Youssef Squali, an analyst for Cantor Fitzgerald.
"Who needs a press secretary when you've got Twitter?"
And yet, even with loads of publicity from one of the world's most powerful leaders, Twitter's stock is stuck in a months-long slump. In the 18 months since Trump announced his run for president, the company's share price has tumbled 45 percent. The company last quarter posted a $103 million loss.
"Even though Trump is all over Twitter, it's not really attracting new users," said Michael Pachter, an analyst for Wedbush Securities.
"It's certainty attracting interest among existing users -- his follower count has gone from 7 million to 17 million in the last year -- but I doubt very many of those people are new users. Twitter hasn't done a very good job of exploiting that."
Instead, financial analysts say Twitter continues to deal with myriad internal issues that have alienated advertisers and made it all but impossible for the 10-year-old company to turn a profit.
Growth has stalled in recent quarters, both in terms of new users and revenue, and almost all of the company's senior management has left in the past two years.
In October, the San Francisco-based company announced it would be laying off 9 per cent of its staff, or about 350 people, many of them in its sales department.
"Twitter is a mess," said Richard Kramer, an analyst at Arete, a London-based equity research firm. "It's not growing users. It's not growing sales. The fact that they put themselves up for sale but weren't bought says its value is expected to only decline."
Even though Trump is all over Twitter, it's not really attracting new users.
Twitter did not respond to requests for comment. Last quarter, the company said it had 317 million monthly active users, a 3 per cent increase from the year before. (Facebook, by comparison, reported 1.79 billion users, a 16 per cent increase, during the same period.)
One of the biggest problems, Kramer said, is that Twitter has long had difficulty attracting advertisers because it knows so little about its users. Unlike Facebook and Google, which collect a plethora of data about users, Twitter doesn't require people to sign up using their real names and doesn't ask for information such as birth date, location or gender.
On top of that, he says, Tweets are often laden with personal attacks and incendiary rhetoric -- not exactly something advertisers want to be associated with.
"What company wants to put up an ad saying 'Colgate gets your teeth whiter' next to a tweet that's full of inflammatory or abusive language?," Kramer said. "It's not brand-safe."
And yet, some say, Twitter's willingness to allow unfiltered, unedited content on its site is a large part of its appeal -- as Trump has demonstrated time and again.
'That lack of fact-checking is Twitter's greatest liability, but also its greatest asset," Squali said. "The fact that Trump is circumventing everybody -- the media, his staff -- and going straight to 20 million, 30 million users, that's very powerful."
"But," he added, "how do you get from there to financial success? That's the billion-dollar question."
