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Twitter ( TWTR )’s live video broadcast app Periscope will have to dodge a big “torpedo” from rival Facebook ( FB )’s live video service, Edison Research said Thursday. And Twitter must offer more than microblogging and instant messaging services if it ever wants to significantly expand its user base and see the kind of social network growth being enjoyed by Facebook, LinkedIn ( LNKD ) and Alphabet ( GOOGL )-owned Google, wrote Edison analyst Richard Windsor in a research report following up on Twitter’s Q4 earnings late Wednesday. “ In the last three months, Twitter has underperformed its rivals — Facebook, LinkedIn and Google — all of whom have seen the size of their user base expand,” wrote Windsor, who said Twitter currently appeals mainly to a niche group of hardcore users, including marketing reps and journalists. Beyond its microblog, Windsor said Twitter should widen its use of Periscope, the live video broadcast app it purchased in January. “This is a priority for Twitter in 2016 and it clearly intends to develop this service into a go-to place for watching live broadcasts,” he said. “If it can do this successfully, then it will be able to emerge as a competitor in the media consumption space, which is where Facebook and Google are currently seeing strong revenue growth, but Periscope needs to dodge Facebook’s live video torpedo.” Facebook’s deep pockets will be a challenge to Twitter, Windsor said. “The problem is that Facebook is competing directly in this space and has far more resources upon which to rely to ensure that Periscope fails to really gain traction,” Windsor said. Twitter Core Problems: Usability, Accessibility While Periscope is a long way from its goal of being “a major force in video broadcast,” Windsor said, “If it can become a ‘go-to’ place for live video, then we suspect that the user base would once again start growing. This would have a big effect on both revenues and the valuation of the company.” Macquarie Capital analyst Ben Schachter also says that 2016 will be a critical year for Twitter, which saw its price targets cut by at least nine analysts Thursday and its stock fall after the company said user growth slowed in Q4, for the fourth consecutive quarter, raising concerns that usage has peaked. “We think that it needs to fix its core usability/accessibility problems first,” Schachter wrote. “We broadly agree that these are the correct focus areas for Twitter, particularly the potential for video. Having said all that, obviously execution has been an issue and we want to see some real progress. “In some ways, this should be simple: Facebook has provided a compelling model for usability and monetization, but Twitter needs to execute.” In December, Facebook opened its live video streaming service to all users in a bid to take on Twitter-owned Periscope and Meerkat. Facebook said the service is being tested in U.S. with a “small percentage of people” on iPhones, after originally releasing a live streaming feature earlier this year for celebrities. Twitter stock hit a new all-time low on Thursday, at 13.91 and was down more than 4% in midday trading in the stock market today , near 14.40. Twitter has remained below its IPO price of 26 since mid-December, sparking buyout talk. Shares of Alphabet, Facebook and LinkedIn were all down roughly 1% midday Thursday, in another rough day for the stock market overall. Scalper1 News
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