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Twitter Looks to Maximize Its Appeal Beyond 140 Characters

It's no secret that Twitter's (NYSE: TWTR  ) social engagement lags that of Facebook (NASDAQ: FB  ) , and that the company has struggled to keep current users on the platform while growing its presence with new users. Nonetheless, Twitter has unleashed a slew of products in recent months aimed at fixing this problem, and in looking at several, it seems clear that Twitter's vision expands far beyond 140 characters.

Cold bucket platform
As celebrities, news anchors, and CEOs take part in the ice bucket challenge to raise awareness for ALS, Twitter CEO Dick Costolo not only accepted CNBC's Carl Quintanilla's challenge, but also used his freezing cold bath as an opportunity to once more showcase videos on Twitter.


Back in 2012, Twitter bought a small company, one that hadn't even launched yet, called Vine. The idea behind the company was to share short videos via social media outlets. Yet many criticized Costolo for purchasing the "pre-start-up," calling it reminiscent of the dot-com era, but Vine has since grown into a service that's widely used on Twitter, one where Costolo himself was able to accept and partake in the cold-water challenge.

With that said, Vine clearly fits into the idea of tweeting, or delivering powerful content in short bursts. However, Vine is only one piece of the pie when it comes to Twitter and the video world, as the company has spent a great deal of its resources in recent months to accumulate pieces that will seemingly create quite the online video presence.

The second-screen movement
Late last year, The Wall Street Journal's Andy Kessler made a rather surprising discovery following the analysis of various research: Almost 50% of millennials tweet or use Facebook while they watch TV. Specifically, Twitter has become a worldwide phenomenon through the discussion of real-time events like the Super Bowl or World Cup, but also through popular television shows such as Pretty Little Liars, and also to get breaking news the second it occurs.

This fact, and the connection to TV, puts Twitter at an interesting advantage when it comes to having the ability to give users both its original tweet platform and a video presence. Essentially, because users tweet so often about events in real time, more transparency about shows, products, or news is the result, as Kessler noted.

Now, the key for making this a big deal for Twitter is owning not only the conversation through tweeting, but also the video itself that's being talked about. The fact is that many consumers still don't get Twitter. Research shows that the overwhelming majority of users who quit the platform have fewer than 30 followers and don't feel engaged with these social movements that occur daily through tweets.

Therefore, Twitter has the opportunity to appeal to a much larger audience, thereby driving more consumers to tweet by expanding its video capabilities. Essentially, the idea is to combine YouTube with Twitter, which as a result means much higher advertising dollars, assuming the company can pull it off.

Building a video empire
It might sound strange to imagine a Twitter-plus-YouTube-like platform, but when looking at the company's most-recent moves, the writing on the wall couldn't be clearer.

First and foremost, there's Vine, which gives users their at-home YouTube-like videos that are so popular. Last year, Vine was the fastest growing application in the world, growing more than 400% from the first to the third quarter. So, clearly, it's a platform that's catching on with Twitter users.

Then there's Amplify, a service that was also launched last year, which includes clips of broadcasts from many of Twitter's partners, including the NFL, NBA, and CBS. Hence, this gives Twitter the news presence, which happens to include advertising as well .

Earlier this year, Twitter acquired an Amplify-like company in SnappyTV, who allows video content providers to edit content for distribution on Twitter. Importantly, the SnappyTV deal was all about improving content, giving Twitter new clients, including Fox, NASCAR, and the NCAA. As consumers have witnessed with traditional cable and satellite companies, acquiring content is important to maintain the user experience, and the same goes for Twitter if it wishes to become relevant in the video world.

Foolish thoughts
With 271 million monthly active users, Twitter would appear huge to the naked eye. In all likelihood though, 140-character tweets have a peak market, and maybe Twitter is nearing that point. However, video is much larger, as YouTube alone has more than 1 billion unique users per month.

Therefore, video is important for Twitter in its goal to increase its appeal to other audiences. When considering the mass appeal that Twitter has with regard to current events, the company has a real opportunity to expand far beyond 140 characters and into a legitimate media giant to catapult user growth and engagement for many years to come.

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  • Report this Comment On August 19, 2014, at 9:27 AM, ARozenburg wrote:

    I think the ability to post videos on Twitter will definitely help the company and I like how the CEO showcased this feature with the ice bucket challenge. Very creative! As an owner of twitter shares, I’ll give it a little more time to see how it will affect the stock, but I’m feeling positive. Plus, TipRanks top analyst consensus also says hold so I don’t think I’m too far off with my assessment.

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Brian Nichols

Brian Nichols is the author of "5 Simple Steps to Find the Next Top-Performing Stock: How to Identify Investments that Can Double Quickly for Personal Success (2014)" and "Taking Charge With Value Investing (McGraw-Hill, 2013)". Brian is a value investor, but emphasizes psychology in his analysis. Brian studied psychology in undergrad, and uses his experience to find illogical value in the market. Brian covers technology and consumer goods for Motley Fool. Brian also updates all of his new and current positions in his Motley Fool CAPs page. Follow Brian on Twitter and like his page on Facebook for investment conversations and recent stories.

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