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Twitter: New CEO has business to profitability lead

June 12, 2015

Dick Costolo gave dismissive. “The Board and I are in complete agreement I’m not worried about” answered the Twitter CEO two weeks ago on the question whether he end of the year still sitting at his post. Now Costolo has resigned.

July 1 Jack Dorsey takes on a transitional basis the chief job . He had founded Twitter in March 2006 along with Biz Stone and Evan Williams, by 2008 he was already CEO. At that time he was forced to resign due to lack of management skills. Also why Dorsey stressed now apparently he thinks “not at all” thing about running the company permanently.

Instead, now wants to carefully search for a new CEO Twitter . But would both internal and external candidates in question. “We are looking for someone who really loves the product,” Dorsey said.

However, with love alone is the new boss hardly advance Twitter. The company’s problems are enormous. The three largest sites: return , reach and Innovation:

. 1 Twitter in the red

Although the company continuously increases its sales – last of 665 million US dollars in 2013 to 1.4 billion in 2014. Nevertheless, Twitter substantial losses writes: 2013 were $ 645 million Lousy, last year $ 578 million [1,999,005].

Even The figures for the first quarter of 2015 disappointed : While sales rose year on year by 74 percent to 436 million dollars. However, the bottom line remained $ 162.4 million loss.

That would be manageable in a leader within an upcoming new segment if at least the coverage would rise adequately. But although Twitter hundreds of millions of dollars for advertising and market research outputs to find out more about its users, the company is weakening too.

. 2 Twitter is growing too slowly

2012 Won 66 million Twitter users added. This corresponds to a growth rate of nearly 50 percent. Since then, the growth slowed steadily: in 2013 were added (25 percent) of 51 million users, last year there were only 47 million new users (18 percent growth). In the first quarter 2015 Twitter counted 302 million active users.

These values ​​make it appear highly unlikely that ever Twitter Facebook
will catch, which has more than 1.4 billion users. The end of 2014 was even overtaken by the photo platform Instagram Twitter. And if the number of users develop such date, is likely to pass before the year is the messaging service Twitter to snapchat.

Twitter users had his back never really given a reason, said Nate Elliott of the consulting firm Forrester Research. While other services introduced new features, Twitter had practically resigned on the spot. “The result was an unspeakably slow user growth.”

. 3 Twitter is unattractive for occasional users

In fact, Twitter is sticking to the principle display all tweets in chronological order. When users see only once a day in their timeline, they see there, what happened in the past few minutes important. A Tweet, to a friend has sent hours earlier, then not present. Facebook on the other hand uses a algorithm to provide users view the most important posts that have been published since the last call of the page – regardless of whether the entry to five minutes, five hours or five days was posted

.

So far, Twitter has only the iPhone app the “While you were away” , which provides a summary of the most popular Tweets. Therefore Twitter threatens to become a niche product that is aimed at users who sit permanently on the computer or take the smartphone at hand. Facebook, however, is interesting for anyone who wants to stay up to date about what friends and family are doing.

The shares of Twitter are traded on the stock exchange since 2013. Since then, the company is constantly under pressure to meet the expectations of Wall Street. Twitter is currently indeed worth 23 billion US dollars. However, this figure is mainly driven by the hope that the company is developing a business model that yields winners in the not too distant future.

The Wall Street seems to Costolos resignation anyway to find hope: The share price rose after the announcement to more than three percent. Investors are therefore assuming that Twitter without Costolo $ 900 million is worth more than him.

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