Twitter Is For ‘Dads,’ So It Has Fewer Users: Analyst

Twitter Is For ‘Dads,’ So It Has Fewer Users: Analyst

Twitter has struggled to grow its user base, and the main reason for this is it being a “tool for dads,” believes George O’Connor, technology analyst at Panmure Gordon. The analyst thinks Twitter is aimed more at businesses and older users compared to other social media services such as Facebook.

Twitter not child’s play

“Facebook is Facebook and one of the big drivers that we are seeing is that there’s this wonderful sort of consolidation about the power of the market leader and Facebook is the consumer big play,” O’Connor told CNBC on Monday.

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Referring to Twitter more of a “business-y play,” the analyst said that he uses Twitter, and not his children, so it’s a “tool for dads.”

Twitter’s inability to up its monthly active users (MAUs) has weighed on its stock, which is down by almost 40% in the last 12 months. For the second quarter, average MAUs for the micro-blogging firm came in at 304 million, up 12% from last year but higher only marginally from the previous quarter. Twitter’s new CEO, Jack Dorsey, admitted that he is not content with the numbers.

Recently, analysts at Morgan Stanley lowered their rating on Twitter to Underweight with a price target of $24, noting that the company needs to focus on making money from the platform and also grow user numbers to please investors.

What does Dorsey need to do

O’Connor says that now Dorsey has to work on monetization at the company. Highlighting the work done so far, the analyst says that the company has developed a “great big website” where users can chat, but the monetization of the platform still needs to be worked on.

Twitter will report its earnings today after the close of the market. The micro-blogging firm is expected to post earnings per share of 5 cents compared to 1 cent per share last year. Analysts expect revenue of $560 million versus $361.3 million last year. For the quarter, the company expects revenue to be in the range of $545 million to $560 million, while it said earnings should in a range of $110 million to $115 million. Apart from the numbers, other thing to watch out in Twitter’s earnings call today will be its CEO. It will Dorsey’s first earnings report as CEO.

On Monday, Twitter shares closed up 1.95% at $30.87. Year to date, the stock is down by almost 14%, while in the last one month, it is up by over 22%.

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