Twitter Inc.'s New Feature Is a Game-Changer

Twitter just became both more engaging and a stronger competitor to Facebook.

Mar 30, 2014 at 12:00PM

In one swift move, Twitter (NYSE:TWTR) just became more social, more enticing for new users, and a more formidable competitor to Facebook's (NASDAQ:FB) Instagram. On Wednesday, Twitter rolled out an update for its iOS app that enables members to tag up to 10 people in a photo and post as many as four photos in one tweet. Here's why it's so important.

Twtr Photo Sharing

Source: Twitter.

But first, more details on the new features.

Twitter photos just got more social
Until now, Twitter has made tagging people in photos nearly impossible. With tweets limited to 140 characters, and each tagged person reducing affecting count, tagging multiple users left very little room for explaining the photo. But now users can tag up to 10 people, and none of the tags will affect character count.

Twtr Photo Sharing

Source: Twitter.

Though the new feature is only available on iOS today, the company says the improved photo sharing is coming to Android and soon.

Boosting engagement when Twitter needs it most
Several concerns have irked Twitter investors in the last four months, sparking a sell-off that has left shares trading about 33% lower today from a 52-week high reached in January. Fortunately, improved photo features should help Twitter address these investor anxieties.

The particular problems Twitter is facing are slowing user growth and worsening retention in recent years. In Twitter's fourth quarter, for instance, its sequential monthly active users, or MAUs, growth fell for the fourth quarter in a row to 4%, down from 6% in Q3. Further, recent data from Twopcharts, a website that monitors Twitter activity, suggests that retention of newer members is becoming more difficult.

Twtr Bird

Source: Twitter. Photo by Marisa Williams (@everydaydude).

Twitter's new photo features address both of these concerns. Not only should it boost engagement from existing members, but making photos far more social could also create greater appeal for newer members, helping retention. The importance of photos in social services is evident by their success and importance in other platforms like Facebook, Facebook's Instagram, and Snapchat. Instagram, for instance, is growing faster than Twitter. The service added 50 million MAUs in the past 12 months, reaching 200 million this month. In a similar time span, from Twitters second 2013 quarter to its fourth, Twitter added 23 million MAUs. Further, illustrating the importance of photos in the social landscape, Facebook even offered $3 billion to acquire photo-sharing app Snapchat.

A better Twitter
Twitter is undoubtedly more competitive with this new feature. While the update gives Twitter shareholders another reason to hold onto the stock in spite of its lofty valuation, investors debating buying into the stock might want to wait for evidence that Twitter can become more than a niche social player before considering buying shares -- or a major pullback in the stock price could also serve as a reason to buy.

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Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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