Does Twitter Have a Strategy? Twitter is not flying high! Shortly after its successful initial public offering in 2014, its market capitalization' has fallen by 50 percent-from $40 billion to $20 billion in late 2018. Twitter's user growth has stagnated, while core Tweeters are tweeting less and less. In 2015, co-founder Jack Dorsey returned as CEO but could not reverse Twitter's de- cline. In comparison, during the same time period, Facebook's market cap quadrupled from some $100 billion Twitter is not flying high! Between 2014 and 2018, it lost $20 billion in market capitalization. to $400 billion. The question thus arises: Does Twitter x9626/Shutterstock have a strategy? Launched in 2006, Twitter is an online news and social networking site that allows its Tweeters to send short into a user's news stream. But compare Twitter's 330 million messages ("tweets") of up to 280 characters or less (and monthly users to Facebook's over 2 billion users-this tells us can include images or videos) to all followers. People who that Facebook's user base is almost seven times the size of follow each other on Twitter can see each others' status Twitter's. Given its much smaller user base, advertisers view updates in their feeds. Users with the most followers in- Twitter as a niche application and thus will direct the bulk of clude Katy Perry, American singer-songwriter and actress, their digital ad dollars to larger sites such as Facebook, with more than 107 million; Justin Bieber, Canadian singer- Google, and Amazon. songwriter, with 105 million; and former President Barack Compared to Facebook, Twitter suffers in ways other Obama with 104 million. than sheer scale. For instance, it has allowed competitors While popular for its scannable content, Twitter's so- such as Snapchat, WhatsApp, and Instagram (all owned by cial significance resulted from its pivotal role during the Facebook) to move into the space it originally created. In Arab Spring (2010-2012), in the Black Lives Matter move- addition, Facebook allows advertisers to target their on- ment (founded in 2013), and for its real-time coverage of line ads more precisely by using the demographic data such breaking news as the raid on Osama bin Laden's Facebook collects, including birth year, university affilia- compound in Pakistan (2011). Many of the most powerful tion, network of friends, interests, and so forth. (This data politicians in the world such as President Donald Trump collection has created a whole different set of problems and India Prime Minister Narendra Modi use Twitter to for Facebook, which is discussed further in ChapterCase communicate directly with the public, allowing them to by- 2). Clearly, Twitter needs a larger user base to attract pass traditional media outlets. more online advertisers and better monetize its social To answer the question of whether Twitter has a strat- media service. egy, let's apply the three critical elements of a good strat- A GUIDING POLICY Here is where Twitter's prob- egy and the three critical tasks of a good strategic lems begin. While its leaders have accurately identified management process: diagnose the competitive chal- and diagnosed Twitter's competitive challenge (to grow its lenge, derive a guiding policy, and implement a coherent user base), they still lack a clear guiding policy for how to set of actions. address this challenge. One way would be to simplify the THE COMPETITIVE CHALLENGE Twitter's business sign-up process. Another would be to better explain the model is to grow its user base and then charge advertisers sometimes idiosyncratic conventions of Twitter use to a for promoting goods and services to that user base. While broader audience. Yet another would be to root out offen- individual users pay nothing, their tweets give Twitter free sive content, fake accounts, and misinformation, and to be user-generated content to drive more traffic to its site. Com- more aggressive about blocking cyber trolls. Perhaps panies pay for "promoted tweets" that are directly inserted even more important, Twitter needs to find a way to take (Continued)back the social media space that's now being dominated Internal turmoil was further stoked by several management by Snapchat, WhatsApp, and Instagram. demotions as well as promotions of close personal friends of COHERENT ACTIONS Changing the goalpost of the CEO. From its inception, Twitter's culture has been ham- which users (core, noncore, or passive viewers that see pered by infighting and public intrigues among co-founders tweets on other media) to target not only confused and other early leaders. management, but it also limited functional guidance for em- To reduce the gap with Facebook's enormous scale ployees in day-to-day operations. Consequences of confus- and global reach, Twitter has attempted to be everything ing directions for strategy implementation followed, to everybody, without considering the strategic trade- including increased frustration among managers and engi- offs. This has resulted in not only low employee morale, neers, which led to the turnover of key personnel. As Twitter but also inferior performance. Declaring that Twitter's attempts to be more attractive to different types of users, it "ambition is to have the largest audience in the encounters trade-offs that are hard if not impossible to rec- world" is not a good strategy; it is no strategy at all. oncile. Consider the search or mobile functionality of an ap- Rather it is a mere statement of desire. With Twitter's plication, for example: The needs of core users are very continuing decline in its market cap, it is likely to end up different from that of casual visitors or passive viewers. a takeover target."