Twitter’s quarterly report does not really paint a rosy picture for the micro blogging platform.
Twitter’s quarterly report (Form 10-Q) to the Securities and Exchange Commission does not really paint a rosy picture for the micro blogging platform and also reflects an over dependence on emerging markets for future growth. Twitter claims 313 million average MAUs in the quarter that ended June 30, 2016, a 3 per cent increase from 304 million MAUs shown in the last quarter.
Listing the risks to its business, the company says financial success will continue to be significantly determined by its ability to grow the number of users and increasing their level of engagement on our the platform “as well as the number of ad engagements”.Read more ↓
“We anticipate that our user growth rate will continue to slow over time as the size of our user base increases,” says the filing, citing the fact that while a higher proportion of US Internet users are using Twitter, the growth will now come from markets like Argentina, France, India, Japan, Mexico and the Philippines where rates will be lower.
“To the extent our logged-in user growth rate slows, our success will become increasingly dependent on our ability to increase levels of ad engagement on Twitter and monetising our total audience on logged-out usage and syndicated properties as well as increasing revenue growth from the sale to advertisers of our advertising products which we place on Twitter properties and third party publishers’ websites, applications and other offerings,” it says, accepting that a majority of the revenue is based upon users engaging with the ads.
And there is a fear that this engagement will drop and new users will stop coming in if “people do not perceive our products and services to be useful, reliable and trustworthy”.
The report lists a number of other factors that could work against the platform like influential users moving to other platforms, inability to convince potential users of the value and usefulness of Twitter, and the chances of a decrease in the perceived quantity, quality, usefulness or relevance of the content generated by users.
While it is clearly looking towards markets like India and Philippines for growth, the company seems unsure how some of these feature phone dominant markets will be able to give value to either the user or the advertisers. “For example, most users in emerging markets like India and Pakistan use feature phones and communicate via SMS messaging, both of which have limited functionality and neither of which may be able to take full advantage of our products and services offered on smartphone or our website or desktop applications. Users who access Twitter through SMS messaging may monetize at lower rates than other users.”
Plus there is another user behaviour in these markets which seems to have Twitter worried: that of users upgrading to newer devices but not installing its app after the upgrade.
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