Mercator LabsTwitter’s Roadmap: Opportunities & Threats

Twitter recently reported its 2014 fourth quarter and fiscal year-end results, beating most analysts’ expectations, sending the stock up more than 15% as the trading week winds down. Two of most widely reported numbers for the most recent earnings release were monthly active users (MAUs), which came in lower than expected, while quarterly revenue nearly doubled year-over-year. Before getting too far into the financial & operational weeds, let’s take a step back and look at the strategic moves driving Twitter’s roadmap.

Recent Initiatives:

Mobile Video Camera

In August of 2014, Twitter introduced promoted videos on the messaging platform after months of testing. This was welcome news to mobile advertisers (read a few lines up re: yearly gains in revenue) as promotional videos can grab users attention for greater lengths of time compare to images, looping video clips or embedded links. Fast forward to the beginning of 2015 and the introduction of mobile video camera- a user-friendly way to record 30 seconds of video to share with people on Twitter. Video will continue to be a key way to both monetize and engage new & existing Twitter users both on the site and potentially through a network of third party sites.

Group Direct Message

Introduced in the first few weeks of 2015, Group Direct Message is a way for smaller groups of friends to interact in their own Twittersphere. With the explosive growth of chat apps such as WhatsApp, Twitter desperately needs functionality that encourages engagement, especially in younger users who might only view Twitter as a news/entertainment aggregation site.

Google Integration

CEO of Twitter Dick Costolo confirmed that the micro-messaging company has reached a deal to feature tweets in Google searches. While we are still a few months away from tweets resurfacing in Google searches, it’s a massive opportunity to turn unregistered users to engaged monthly-active users. Look for this to greatly improve data licensing revenue in the latter half of 2015.

Acquisition of ZipDial

In order to grow Twitter’s user base, they have to think creatively. That is why they acquired ZipDial, a platform that delivers content in multiple forms included SMS. This encourages users in areas of intermittent service or who simply can’t afford large data usage to leverage ZipDial, and subsequently content delivered from Twitter’s platform.

There has been plenty of media pundits hawking on MAU reports or calls to replace CEO Dick Costolo. In the end, Twitter’s roadmap for success is clear and the messaging service knows how and where it needs to compete in order to grow and keep both its user base and investors happy. It has laid the foundation to make that happen.