Twitter recently has become profitable and beat Wall Street’s low expectations. Profitability does not solve the issues that the company has going forward.
The company is not the only social media company that has to deal with fake accounts, trolling, and foreign agents spreading misinformation to influence US elections.
These issues, combined with stagnant growth and executives quitting, have led to questions about who is actually running the company. All the solutions Twitter has offered have resulted in more problems or calls for Twitter to take more action.
According to Michael Connor, the man behind a company called Open Mic pushing tech companies to be more transparent about problems, Twitter is playing whack-a-mole with their problems. In fact, Connor says that Twitter does not even know what problem they face.
Leadership trouble
The biggest issue Twitter has is its lack of leadership due to the departure of Chief Operating Officer, Anthony Noto to become CEO of SoFi. Noto played a critical role in running the company because the CEO and founder of Twitter, Jack Dorsey, also serves as the CEO of Square.
Dorsey has taken control of Twitter without Noto despite investors calling for a more focused CEO. Dorsey has rejected those claims and stated that the amount of time he spends is not as important as how he spends his time at the company.
The issues are more profound than that thought. Dorsey has been called an authoritarian leader that is not open to innovation, which is apparent in the lack of innovation at Twitter. This lack of innovation could be the difference between the proper handling of these issues and improperly handling these issues.
For instance, Mark Zuckerberg has the final say on Facebook as he is both the CEO and Chairman of the Board. However, he is still open to his team changing Facebook so long as he can make the final decision on the change. This has resulted in Facebook successfully navigating their own set of issues.
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The leadership trouble that Twitter faces is the biggest issue. Once Twitter can figure out their leadership, it will be better suited to navigate the problems listed below.
Stagnant user growth
The first major existential issue that Twitter has is its stagnant user growth. They have practically no user growth but remain steady with their monthly active users. Much of this might be because of their clamping down on fake accounts, which make up a surprisingly large number of accounts on the platform.
However, Twitter has faced issues with user growth since its inception because they do not lock its content. A Twitter account is not necessary to view tweets on the site, which means fewer users can receive advertisements.
For instance, a user can bookmark President Trump’s Twitter page and view his tweets without ever having a Twitter account. This makes Twitter a great platform for businesses, but it is terrible for generating revenue. This is an issue that Twitter will have to resolve if it wants to continue making a profit.
Fake accounts
The next issue Twitter faces is the proliferation of fake accounts on the platform. It is estimated that over 15 per cent of accounts on Twitter are actually fake accounts created by either bots or used by individuals to harass users.
This fake account epidemic ties into most of the other issues plaguing the site. For instance, foreign intelligence agencies will use fake accounts to push their fake news stories to the top of the Twitter feed.
Fake accounts are also used to manipulate Twitter hashtags, which can sway public opinion on certain topics. On the other hand, there are entire networks of accounts people use when they buy retweets on their accounts’ posts and tweets.
This makes eliminating the fake account problem one of the most important issues for Twitter. If they can eliminate the fake accounts on the platform, then most of the other problems will resolve themselves.
Bans will be more effective, foreign governments won’t use Twitter as a weapon, and hateful users will be permanently banned from the platform.
Foreign interference and regulation
Foreign officials using Twitter to spread disinformation amongst Americans is a major issue. In fact, this is such a major issue that social media companies have been called before Congress to testify about the problem.
This has led to many rumours that tech companies will face regulation. Some US senators have even stated that the tech companies will almost certainly meet regulations at some point.
However, no legislation has been drafted, and the Department of Justice has not brought a case against any social media company concerning regulation.
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At the moment, Twitter will just have to focus on removing as many foreign intelligence agencies from the platform as possible. So far, they have done well with that task. Twitter recently banned over 300,000 accounts linked to a Russian and Iranian plot to interfere with the 2018 general election.
Dorsey has stated that there is still much more that needs to be done and that these issues will not be resolved before the 2018 election. He does believe that the 2020 presidential election will resolve the issues.
However, Congress will likely force some form of regulation on the tech giant before 2020, but that is still only speculation at this point.
Future plans for Twitter
Overall, it is great for Twitter to make a profit after 12 years in business finally. It gives their investors some relief. Their next major hurdle is to resolve the leadership issue, which can likely be solved by placing the right person as COO.
Alternatively, Dorsey might even be forced by the company if investors are not satisfied with his leadership as Twitter faces regulation.
Investors have grown increasingly annoyed at Dorsey’s apparent lack of leadership and refusal to answer investor calls for him to step down from Square or remove himself from the CEO position at Twitter. Once the leadership issue is resolved, many of the other issues facing the company will be resolved.
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