Could TWTR Stock Catch Up to Facebook?
The return of co-founder and CEO Jack Dorsey to Twitter, Inc. (NYSE:TWTR) could spell enormous returns for TWTR stock. Dorsey is pushing for a series of reforms to the company’s operations that mimic earlier actions taken at Facebook, Inc. (NASDAQ:FB). If the plan works, Twitter stock could become as valuable as Facebook stock.
Dorsey laid the foundation at Twitter, but left before the company went public. He went on to found a digital payments company called Square, Inc. The name might ring a bell, because Square recently premiered on the NASDAQ stock exchange.
Dorsey is still the payment service’s CEO, but he’s now actively running both Twitter and Square, which means he will need a lot of coffee and the power to delegate. Luckily, the groundwork for his grand plan at Twitter is already laid.
Twitter seems to be following Facebook into the world of long-form publishing. Despite being famous for its 140-character post limit, Twitter will create an avenue for lengthier material to fully leverage its platform. (Source: “Twitter Plans to Go Beyond Its 140-Character Limit,” Re/Code, December 12, 2015.)
After all, Facebook has turned the publishing industry upside-down by charging a fee for access to its vast subscriber base. If Twitter broadens its service offerings and tries to make the same move, it could easily make a comeback.
Twitter Stock: The Next Big Thing
It’s not like the 140-character rule at Twitter is unbreakable. Earlier this year, the company removed that restriction from personal direct messages. Plus, retweets now offer a comment function that leaves enough room for a grammatically correct sentence.
Both of these changes were small, but they proved that “140 characters” is more a Twitter guideline than a hard-and-fast rule. The product designers at Twitter are especially freed by Dorsey’s return, because if he says it’s OK, no one feels like they are undermining the essence of Twitter.
Mark Zuckerberg, on the other hand, never left Facebook. The company ploughed ahead with “Instant Articles,” a product that allows Facebook users to open links almost immediately. Lag times irritate users, prompting many of them to leave before the link even opens. For this reason, Facebook realized that opening links to articles and native ads within its own app was beneficial on many fronts. As a result, the company provided a smoothness that was user-friendly, while also establishing the site as a distributor of content.
The rest was easy. With more than 1.55 billion subscribers, Facebook could start charging content creators for access to their own followers. Considering the smoothness of the Instant Article function, many publishers bowed to Facebook’s demands.
Twitter is in a similar bargaining position. It has built its own version of Instant Articles to give publishers a way of delivering long-form content to Twitter users. So far, though, Twitter just hasn’t leveraged its 320 million active users with the same ingenuity that Facebook has. However, Jack Dorsey could help turn the business around, as he morphs Twitter into a gateway between content and audience. (Source: “Twitter Inc. Form 10-Q Filing,” Securities & Exchange Commission, November 6, 2015.)
Facebook Should Watch Out for TWTR Stock
I wouldn’t be surprised if TWTR stock breaks out in 2016. Expectations for the company’s performance are super low, so weaving together a winning strategy could launch Twitter stock sky-high. Jack Dorsey could save his first company from ruin.
To be honest, the only way to forecast how well Twitter stock will perform is by using the actual app. I personally loved the retweet and comment functions. Word has it that Twitter will also remove URL links from its word count, which would be an awesome move.
Ultimately, it may be the shift away from 140 characters that saves Twitter.