Please ensure Javascript is enabled for purposes of website accessibility

Dorsey Sets the Record Straight on Twitter's Priorities

By Adam Levy – Feb 18, 2016 at 8:50AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The new CEO outlines five ways to serve its focus of live content in his recent letter to shareholders.

Source: Twitter.

Jack Dorsey's return to Twitter (TWTR 1.37%) was supposed to help turn things around. Instead, user growth has continued to slow to the point where Twitter actually lost users in the fourth quarter.

But in management's fourth-quarter letter to shareholders, Dorsey says the last six months since he rejoined the company were spent structuring the organization and leadership teams to enable better focus. And that focus for 2016 is "what Twitter does best
 -- live content. Dorsey contends that Twitter does live content better than anyone in the world. He outlined five key areas management is prioritizing to serve its focus.

Refinement of the core service
Twitter has a steep learning curve. Products such as Moments, which display tweets organized by topic or event, are designed to make the product more approachable. Still, Twitter has a long way to go to make its flagship app as accessible as something like Facebook (META -1.45%).

Dorsey says it plans to change the reply rules, removing the need for the "." before an @reply so the tweet goes out to everyone instead of just the users mentioned. He also mentioned the algorithmic timeline feature the company introduced ahead of its earnings report, which displays the best tweets users may have missed since their last login. Dorsey goes on with product improvement ideas.

The most important improvement to make, however, is with the onboarding process, something the company's been working on for over a year. Dorsey admits there's still work to do in that area as well. The primary goal of the onboarding process should be to teach potential users not only how to use Twitter, but why they should use Twitter. "Why Twitter" has been the focus of CFO and head of marketing Anthony Noto since Dorsey took over, and the company still hasn't answered it. We're waiting.

Live streaming video
After acquiring and launching Periscope last year, Twitter quickly became a leader in live streaming video, especially on mobile. But it has work to do to remain the leader. Earlier this year, Twitter integrated Periscope, allowing users to view Periscope videos live inside Twitter. This gave Periscope users access to a broader audience as well as Twitter's ad products.

But Twitter has competition. Facebook, in particular, is expanding its efforts around live streaming video. The company extended the feature to all iOS users in the U.S. after a trial with journalists and celebrities last year. With Facebook's significantly larger user base, Twitter needs to make consistent product improvements to ensure it can keep its live audience.

Catering to creators
Twitter's value is derived from the core group of users who send out lots of tweets -- tweets that people want to see. That includes journalists, comedians, politicians, musicians, athletes, activists, and more. Providing more tools for those users to connect with their audience will improve engagement among influencers and among their audiences.

Twitter is already losing engagement among some big celebrities who are spending more time on Instagram or Facebook. That's where their audience lives, spending one out of every five minutes on mobile on one of those apps, according to Facebook management.

To compete despite its smaller audience, Twitter needs to find a way to help influencers reach more people. That's where efforts such as the algorithmically sorted timeline can come into play.

Safety first
Twitter continues to battle online harassment on its platform through efforts such as the Trust & Safety Council it announced earlier this month. Harassment is easier on Twitter than on some other platforms such as Facebook, because users can hide behind fake usernames. When users are harassed by strangers on the Internet, it doesn't bode well for their likelihood to return to that site.

Dorsey says the company plans to invest heavily in technology to reduce abuse, make it easier to report, and improve response times. It's also revamping policies to improve its ability to respond and stamp out abusive accounts. At the same time, he says it needs to do a better job of educating users of the safety tools and features available on Twitter as it rolls them out.

While safety measures may help prevent some people from leaving the platform, it doesn't solve the core problems facing Twitter -- mainly growing users.

Invest in developers
Years ago, Twitter made the mistake of limiting developers' access to its applications programming interface. The API allows app makers to scrape data from Twitter, such as tweets, followers, or user data, for use in their own projects.

Eighteen months ago, Twitter unveiled Fabric, a new software development kit for mobile apps that integrates Twitter's API, its mobile ad network MoPub, and other unique features. Apps built using Fabric are now used on over 1.6 billion devices, according to Dorsey. These apps are a key piece of Twitter's syndicated audience, which it says reaches 1 billion people every month.

As the total audience strategy becomes even more important in light of the lack of active user growth, keeping developers happy moves up the priorities list.

Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$134.40 (-1.45%) $-1.97
Twitter, Inc. Stock Quote
Twitter, Inc.
$42.09 (1.37%) $0.57

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.