Rumours of Twitter's death have been greatly exaggerated
Twitter is not doomed. But it may soon introduce a raft of changes to the service, the company's European vice president for sales tells our technology editor
Published 25/02/2016 | 02:30
To read the press, Twitter is doomed. Its share price has collapsed and it isn't attracting new users to its service. It's a Wall Street investor's narrative. If a company such as Twitter is not hot on the heels of Facebook - exponential growth and emerging dominance in some commercial areas - it's deemed to be a flop.
Even with Twitter's 300 million addicted daily users, 60pc revenue growth and large chunks of the western world's communications on board, the company is still "a disappointment", according to these commentators.
But is it? What is Twitter's real value in our lives? Is it commercially viable in the long run? Will it succeed in attracting new users and advertisers?
Last week, I caught up with Twitter's European vice president for sales and its head of the company's biggest non-US facility, Stephen McIntyre.
Adrian Weckler [AW]: Most of the recent focus on Twitter has been on its stalled user growth. Do these stagnant figures mean that Twitter is doomed?
Stephen McIntyre [SM]: Reports of our death have been greatly exaggerated. Last year, we had $2.2bn in revenue, 58pc year-over-year growth. That makes Twitter one of the fastest-growing public companies in the world.
And we've got 130,000 advertisers. That's 130,000 paying customers delivering more than $2bn in revenue. So there are a lot of customers who are very, very happy with what they're getting. This is what has enabled this sort of growth.
AW: But what about Twitter's lack of growth in attracting new users?
SM: It's true that monthly active users were flat for the first time on a quarter-over-quarter basis and so that attracted a lot of attention. But in January, we saw monthly active users numbers pick back up to third-quarter levels so that's a positive sign. The other thing to bear in mind is what the overall audience is.
This is something that hasn't attracted a huge amount of attention, but advertisers think about it. If you look at the number of people who come to Twitter.com each month, unique and separate from the monthly actives, it's another 500 million people. Now we've only just started some tests to monetise that but 500 million additional unique users are coming to Twitter.com, so overall that's an audience of 800 million.
So if the deeper question is whether there is enough of an audience to maintain this momentum and continue to build revenue growth, the answer is yes.
AW: What about the core users, though? Are changes to Twitter's service on the way to help attract new users?
SM: Our strategic belief now is that we don't have to invent a new Twitter, but by making seven or eight important changes this year, cumulatively they will have the impact that we want. You've already seen two of these released recently in a new measure to help companies with customer service and the improved home timeline.
AW: Will tweets soon exceed a 140-character limit? Is that one of the changes to come?
SM: Longer tweets? Yeah, that's one that's received a lot of attention. There are no announcements on the 140-character thing but it clearly sits within the theme of how to make Twitter an even better, faster, more fun publishing platform.
Which we think is clearly a differentiator for us. An important theme since Jack [Dorsey, Twitter co-founder and chief executive] has come back is that he wants to make tweeting easier, faster and more fun. What's been clear since he came back is that everything's on the table for discussion.
AW: What about in-tweet purchases? It's something that Twitter and others, such as Stripe founders Patrick and John Collison, have been talking about for a while.
SM: Not over here. We started a number of tests in the US, but the intention right from the start was just to investigate it. We'll start in the US, iterate, make some changes and then decide whether or not we're rolling out globally or not.
There has been no decision to roll such a service out globally yet. But we've learned some interesting things which we've been able to fold into other products, about how people behave with commercial intent on Twitter.
AW: How about spinning off a messaging service based on Twitter's direct messages (DMs)? You've recently added video to DMs, but what about a separate app or service?
SM: We've seen a huge increase in DMs. I don't know whether we talked about this publicly but it's up 60pc year over year. And that's with relatively modest changes to that product. So this is an important use case of Twitter that we underinvested in the past. But there are no plans to spin it off or anything like that at this point.
AW: Anything else, product wise?
SM: Obviously there are things coming up that we haven't announced. So people internally see the future roadmap as well as the recent things we've announced. I think the pace of product launches is, in my experience of tech companies, one of the most important things.
AW: Senior global executives, including chief financial officer Anthony Noto and executive chairman Omid Kordestani, have recently invested personal funds in shares. Is something like that seen as a morale boost for others working in Twitter?
SM: Well it's a personal decision for any individual whether or not to buy or sell shares. I can't speak for them.
AW: But morale is good here?
SM: Yes, morale's good. As I've said, the pace of product launches has been a big thing. Another is Jack coming back as CEO. He's a kind of an icon in Silicon Valley. I think people like the product vision that he brings to the company.
AW: Is it frustrating to sit back and watch such a gloomy media prognosis around Twitter's future?
SM: Before we went public two and a half years ago, we talked a lot in the company about the rollercoaster ride that was coming up. And we talked specifically about the cases in the papers where they'll say we're fantastic when we know we've got more to do. And also the cases where they'll say we're terrible when we know we've got great stuff ahead or where we're better than they say.
That is just something that you have to be prepared for when you go from being a private company to a public company. I've worked at four public companies throughout my life and all of them have had ups and downs. This was anticipated. It doesn't mean when there's a lot of bad press that you don't notice it. But inside the company, the leadership team tries to keep everybody very focused on the product roadmap that we have. The stock price doesn't affect any of the internal operations of the business. And it's other people's opinions about the company. The opinion that matters most is ours.
AW: British actor Stephen Fry recently quit Twitter because of what he called its degeneration into a cesspit of abuse, offence and trolling. What do you think of this element of Twitter's legacy?
SM: I think if the question is 'were people nasty to each other before Twitter?', then the answer would be yes. More broadly, I think the internet in some way holds a mirror up to society and sometimes we don't like what we see when we look in that mirror. Things like prejudice and abuse and nasty comments. They can't be eradicated with the click of a button. So we have a more connected, faster-moving world and we're not going back. However, there are a few things I think companies like Twitter can do. Our policies and rules have to be right and we have made many changes to these over the last couple of years to rule out specific types of behaviour such as abuse or specific threats of violence. When that's brought to our attention, we can take action.
Changes to the product are very important as well. We've made it easy now to mute users within a tweet for example, or to block users, or to report content. Those three things together are quite powerful tools. I'd still say, though, that the vast majority of the content on the platform is actually pretty positive. And so I don't think the problem's getting worse, although it's something that's bigger than Twitter and it's not going to go away.
AW: Twitter chief executive Jack Dorsey recently tweeted his support for Apple chief executive Tim Cook on the issue of witholding co-operation from the FBI's request to get around an iPhone's security system. Is this a position that you think is echoed around the industry?
SM: Well, I can't speak for Jack but we take user data very seriously. And I think this is seen by many people as an important test case.
AW: How is Twitter's Dublin office faring, generally? When will you move into your new building premises adjacent to Merrion Square?
SM: We have well over 200 people here now and are continuing to hire. We've taken space for up to 600 people in the new office block [Cumberland House] and we hope to move in before the end of this year.
We grew rapidly over the first two or three years here and put all of the functions in place - sales, marketing, HR, legal, engineering and all of the 20 or more functions that support the business in Emea and not just Ireland. We're continuing to hire in all of those.
The Dublin office is not only the biggest office outside the US, it's the most senior office as well. We've got more functional leaders and directors at VP level, more than any other office outside the USA. Mark Little was a big hire recently for us. We have other people who would have also been well known in the industry too, like Brenda O'Connell who runs business development across Emea and Sinead McSweeney who runs public policy across Emea.
AW: And what about the business side of things? How do they react when they hear doom and gloom around Twitter's prospects?
SM: What advertisers tend to care about more is the specifics of whether you can help them meet their marketing objectives.
For those focusing on branding and awareness, that was really the bread and butter of Twitter, where Twitter started. And Twitter's still tremendously successful in that area. During the recent Superbowl, I think 90pc of the TV advertisers on the Super Bowl on CBS were active during the game on Twitter. So it's just as popular than ever, or even more so. The press cycle stuff hasn't really affected that at all. DR [direct response] advertising is a newer part of our business and we've launched a lot of newer products there over the last couple of years. It's one of the faster-growing parts of our business although it's smaller than the branding part. But for those kind of advertisers, they just care about the numbers. So if you can show good performance for them in terms of cost per acquisition, that's really all those guys care about.
AW: So you're optimistic for Twitter's prospects this year?
SM: Oh yes. Twitter is the most important, most powerful communications tool of our time. It is more relevant to global culture and Irish culture today than it was a year ago. So there is no sense of creeping irrelevance of the type that affects some tech companies. We're going through a negative part of the press cycle for sure, but there are an awful lot of positive things too. When people see the Taoiseach announce the election on Twitter or when the leaders' debate ends up trending at number three globally, it's all just a reminder that no matter what the latest journalist says, we know this thing is important.