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Twitter Inc. CEO Jack Dorsey Walking a Thin (Time) Line With Latest Update

By Tim Brugger – Feb 19, 2016 at 12:41PM

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The tweet master’s latest move to jump-start user growth may end up backfiring.

It's no secret that Twitter (TWTR 2.57%) has user growth issues. Its recent Q4 earnings announcement included a nice jump in revenue year over year but was, at least initially, overshadowed by its poor monthly average user (MAU) results. CEO Jack Dorsey continues to explore ways to bring on new users and engage existing MAUs. Doing away with the 140-character limit is just one of the possibilities Twitter is reportedly exploring to try to reinvigorate user growth.

But change, as much as Twitter recognizes it's necessary to turn the tide, isn't as easy to "sell" to existing users. Recent scuttlebutt that Twitter was considering reordering its timeline demonstrated just how difficult it's going to be get things turned around. Last week, word got out about the pending change, and the tweets started flying -- and they weren't positive. And now things may have just gotten worse.

Did I say that?
The brouhaha began early in February that Twitter was considering reordering its timeline using an algorithm that would move tweets up the ladder based on what it thought would be of most interest to users, rather than the most recent tweets.

Twitter wasn't the first social media site to consider using algorithms to alter what its users saw when logging in. Facebook introduced a similar change a while back, which was also received by its "friends" less than enthusiastically. Facebook stuck to its guns, however, and based on its continually growing base of MAUs -- it reported another 40 million users last quarter, and now boasts 1.59 billion, ignoring the initial fervor has worked out like a charm.

Dorsey took a different tack in responding to the grumblings of its users about the possible timeline change, at least initially. On Feb. 6, Dorsey posted a tweet addressing all the negative feedback coming from the #RIPTwitter camp, saying, "We never planned to reorder timelines next week." That seemed to have been a pretty clear indication that Twitter's timeline would remain just as it was: in chronological order. Then, the other shoe dropped.

Just days after saying Twitter wasn't even considering any timeline changes, it announced that, yes, in fact it was implementing an algorithm-based timeline. Android, iOS, and desktop Twitter MAUs will see the change rolled out by default "in the coming weeks." If that sounds as if Dorsey reneged on his statement that Twitter "never planned" to change its timeline order, it's because he did. The question is: What, if any, backlash will Twitter see from its MAUs?

Does it matter?
The update isn't as bad as some Twitter fans may think, in that it can be shut off and the timeline will revert to what longtime users are comfortable with. Also, though tweets that Twitter thinks are most relevant will be first in line, so to speak, the balance will be shown in chronological order as they've always been.

The objective behind the change is to help ensure that tweets of importance aren't missed if it's been a while since a user has logged in or for those hardcore tweeters who follow multiple accounts. The concept makes sense, and like Facebook before it, Twitter will likely ignore the grumblings of its MAUs who disdain change. But it's not just Dorsey's about-face at issue.

Twitter's popularity is largely based on real-time tweets from its bevy of celebrities, sport stars, and the like, sharing their respective thoughts on breaking news and events. Some of those tweets will, conceivably, not make it to the top of a timeline unless Twitter's algorithm determines it's what a user is most interested in.

Dorsey's backtracking, just days after posting that Twitter never planned to tweak its timeline, certainly isn't going to inspire confidence among its 305 million MAUs, which was already down from Q3's 307 million. That said, Twitter will likely take another page from Facebook and put up with the initial "noise" and move forward. The bigger question is: Will the timeline change help boost MAU numbers? Because for investors, that's really all that matters.

Tim Brugger 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.

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