Will Twitter Have to Become Facebook as a Matter of Survival?

Twitter's failure to monetize will result in the company having to choose between the happiness of its core user base and profit. 

Getty Images

Now that the release of Twitter’s new timeline algorithm is official, it looks like the reports of Twitter’s demise were a bit premature. To the relief of many of the social media service’s core users, the new algorithm was introduced as an “opt-in” feature, meaning that unless users flip the switch, their timelines would remain unchanged. However, according to reports, that respite will be short lived: Once Twitter has rolled out the change across its various platforms, the new “relevance based” timeline will become default, meaning users will have to opt-out to keep the reverse-chronological timeline system.

As previously noted, many of the “innovations” made by Twitter so far amount to busy work to assuage investors worried about the company’s failure to properly monetize. The introduction of “moments” and the switch from “favorites” to “likes” were a signal to investors that the company recognizes it’s under-performing, yet are actively trying to make improvements.

But make no mistake, Twitter’s day of reckoning is soon to come. For the first time, the social media service reported a loss of more than 2 million users compared to the previous quarter, sending stock prices tumbling to an all-time low. After over a year of stagnation, investors’ worries are on the cusp of becoming full-scale panic. Cosmetic appeasements will no longer suffice. The company needs to make wholesale changes, and it needs to make them quickly.

Twitter CEO, Jack Dorsey

Getty Images

Investors are now coming to the realization that Twitter, in its current form, simply cannot be monetized, at least to an extent that it meets their expectations. As such, Twitter now finds itself in the unenviable position of having to pit user satisfaction vs. profit; risking alienating its very loyal (and vocal) core user-base in an attempt to attract new customers and encourage more advertising revenue. For a site that has always prided itself on staying true to its users, Twitter now finds itself between the proverbial rock and a hard place.

Twitter’s most seasoned users have spent years cultivating their timelines to best reflect their interests. They already have their network established: They’ve already formed their social circle and know how to access their desired content. They know which accounts to follow for news, which celebrities post the best pictures, or who to follow for the best recipes. For these users, aside from calls for better protection against harassment and the ability to edit already sent tweets, Twitter works pretty much exactly the way it’s supposed to. Subsequently, any new “innovations” are seen as unnecessary solutions to problems that never existed in the first place.

However, for users who are signing up to the site for the first time, Twitter’s learning curve appears steep. Usability, interaction, and even unofficial rules of etiquette all give new users the sense of spectating rather than interacting. Getting onto Twitter in 2016 is akin to being invited to a party where you don’t know anyone, only to find out after you showed up that the person who invited you made other plans. Even that initial isolation would be OK if Twitter as a content aggregator was more easily navigable.

The bottom line is that to attract and keep new users — which it has to do as a matter of survival — Twitter is going to have to become more like Facebook. It’s going to have to make it easier for new arrivals to connect to people they already know, to help users expand those social connections through interaction, and to make it easier to access the content most relevant to them. And of course, it is going to have to start figuring out ways of leveraging those changes to put more black ink on the books.

To accomplish that last goal, the transition to becoming Facebook is going to require more than new algorithms such as “Moments,” and revamped “Like” buttons. Rather, Twitter needs to overhaul its core corporate philosophies. While Twitter has traditionally held to the mantra of prioritizing user satisfaction over profit, Zuckerberg and Co. have made no bones about optimizing their ability to monetize Facebook, user backlash be damned. From sketchy “emotional experiments,” forcing users to use their real names, and even outright selling of user information, Facebook has made plenty of moves designed to increase revenue that have earned them the ire of their users.

Twitter stock prices are down over 100% since their IPO in 2013

Getty Images

Yet the numbers don’t lie. While Twitter loses users, Facebook continues to expand. Its base increased from 1.55 to 1.59 billion users in Q4 of 2015. Twitter has seen share prices plummet since 2014, while Facebook shares have almost tripled since their IPO in 2012. And though Twitter made some money in the final quarter of 2015, it didn’t make nearly enough to keep the market happy. Meanwhile, Facebook brought in almost double the revenue every quarter that Twitter generated in all of 2015.

From an investor’s standpoint, it’s a good thing on many levels that Facebook isn’t necessarily a competitor (the majority of social media users active use multiple social media sites), but rather offers a proven playbook for monetization. From an existing user’s standpoint, it remains to be seen whether Twitter’s inevitable Facebook-ification will ultimately be a deal-breaker.