This Article is From Feb 10, 2016

Analysis: Twitter Isn't Facebook, But Wall Street Expects It To Be. That's A Problem.

Analysis: Twitter Isn't Facebook, But Wall Street Expects It To Be. That's A Problem.

Twitter chief executive Jack Dorsey was quick to shut down rumors that Twitter had plans to change the way it organizes timelines. (AP photo)

There was a whole lot of uproar over the weekend over reports that Twitter is planning to change its real-time messaging feed into something more like the Facebook News Feed. Under the new system, reports said, messages would be ranked, in part, by the quality of the post rather than just when it was posted.

That set off the company's users, who worried that changes to the feed might hurt one of the network's most distinctive features - its ability to tap into real-time conversation.

Twitter chief executive Jack Dorsey was quick to shut down rumors that Twitter had plans to change the way it organizes timelines this week, posting Saturday that doing so was never in the cards: "Hello Twitter! Regarding #RIPTwitter: I want you all to know we're always listening. We never planned to reorder timelines next week."

But Twitter is, of course, in a period of great change. Sure, it has a devoted user base of more than 300 million who love its fast-paced, spontaneous, often tangled and random streams of conversation. Yet it's also facing pressure from Wall Street; as Wired reported Monday, Twitter's current market value of roughly $10 billion puts it below the likes of private "unicorns" such as Pinterest and Snapchat. Investors want it to amp up its slowing user growth, find a way to appeal to a broader audience and generate more revenue off the users it already has.

In other words, investors want it to be like Facebook.

There's no doubt that Facebook is in an enviable position right now. It dominates the social media world. The firm recently reported its first-ever quarter with more than $1 billion in profit.

And on Monday, the firm eMarketer released a report projecting that the social networking behemoth will remain the market leader at least through 2020.

"Facebook remains the king of social networks, and the usage increases are coming primarily from people who are Generation X and older," said principal analyst Debra Aho Williamson in a post from eMarketer.

Twitter, meanwhile? It's more of a work in progress, analysts said.

"Twitter is clearly trying to grow its ad stack through acquisitions - like MoPub, TellApart," said Jennifer Wise, a mobile and social advertising analyst for Forrester, citing two advertising firms bought by Dorsey's predecessor, Dick Costolo. "It's acquired the tech to add sophistication to ads, enhance targeting and tracking, and expand delivery beyond its walls. So a lot is in the works. Still time will tell how successful it will be."

The key problem with expecting Twitter to behave like Facebook, however, is that they're completely different products. Sure, they're both social media networks. But people use them for very different things, and in very different ways.

Aaron Smith, research specialist at the Pew Research Center, said that Facebook's demographics more or less reflect those of the American online population - meaning that pretty much everyone uses Facebook. Twitter is much younger, and finds itself popular with younger, more racially diverse users who are also more likely to live in urban areas.

Here's another illustration of how different these audiences are: "Almost half of Internet users over 65 use Facebook," Smith said. Among the same age group, for Twitter, "it's just 6 percent."

That smaller, younger audience is also heading to Twitter for a different purpose. On Facebook, users tend to come across news incidentally. Twitter is a place you actively go to seek it out.
"Twitter is perceived as a news destination in a way that Facebook isn't," Smith said.

The flip side of that, from a marketing perspective, is that you don't get nearly the kind of engagement on Twitter that you do on Facebook - people are scrolling through individual messages quickly, looking for trends in multiple posts rather than spending a lot of time with one.

"Advertising on social sites generally have promise: They pull large audiences and, almost more importantly, on some like Facebook and Twitter people are used to brand interactions on them," Wise said. "But the consumer doesn't want it to interrupt their experience. So the ad has to align with the site." To do this, Twitter is creating more site experiences that more brands can integrate into, she said.

Pulling posts together as Twitter has done with its "While You Were Away" feature or highlighting trending topics can help create new avenues for the firm to focus some of its users all-too-fleeting attention. It gives a way for the network to seem less frantic, and attract future users.

But, as the reaction to reports about a reordered timeline indicate, there are some things about Twitter that its current users aren't happy to see altered. So Twitter's problem remains being able to balance those two aspects - remaining true to Twitter's fast pace while also creating engagement in such a way that it doesn't betray the company's core design.

Right now, Dorsey is doing a lot to appeal to the base, and assure the users he has that the network that they love - the network he built - isn't going anywhere. He tweeted, "Hello Twitter! Regarding #RIPTwitter: I want you all to know we're always listening. We never planned to reorder timelines next week."

He also tweeted, "Twitter is live. Twitter is real-time. Twitter is about who & what you follow. And Twitter is here to stay! By becoming more Twitter-y."

But with the company due to report earnings Wednesday, he will also have to find a way to assure impatient investors - investors who've sent the stock down 36 percent since the start of 2016 alone - that he is hearing them as well.

© 2016 The Washington Post
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