Twitter inc in 2018

Twitter Inc in 2018
A presentation
By
Babafemi Ekundayo and Zachary Harrison

@YourTwitterHan
dle
Zachary Harrison

Agenda
1. History of Twitter
2. Company Overview of Twitter
3. Financial Performance of Twitter
4. Twitter Competitors
5. Answers to the Questions
6. Conclusion

@Jack
@Ev @Noah
@Biz
Founders of Twitter

Odeo
Twitter came from Odeo, which was a podcast company founded by Noah Glass
Odeo Hires a Web Developer Called Jack Dorsey, Who will later be the CEO of Twitter
Apple Launches its own Podcast Software

Odeo does not perform well in comparison and Ex-Googler and Investor Evan Williams decides
Williams Encourages Corporate Intrapreneurship, Encouraging staff to produce new products and
The Pitch is poorly received by the board.
Odeo transitions to Obvious Corp after shares are rebought for $5million
Jack Dorsey Pitches

Obvious Corp. Invests in Twitter
Jack Dorsey launches twitter in 2006
Jack Dorsey assumes the role of CEO of Twitter; He will get fired two years later

“If something is
Free, Then
YOU
are the
commodity”

Social
Media
Industry
Advertisement
Personal Data
Sales

Consumer Profile
#Young #Smart #Trendy #Funny
#NewsSavvy #Sarcastic #Impatient
#PoliticallyVersed #Companies #Foodies
#Politicians #Celebrities #CelebrityNews
#Millenials
#Entreprenuers
#BreakingNews
#Promoters #Fun #FOMO
#Connect

#WhatUsersGet?
#QuickInformation

#WhatUsersGet?
#CelebrityEngagement

#Tweets
40 › 75 › 140 › 280

Twitter is limited in features when compared to rival Facebook

#AdditionalServices
#Vine
#Periscope
Vine has been shutdow
Periscope will be shu
in March 31, 2021

#TwitterPlatforms
Cross Platform Mobile Applications

#TwitterPlatforms
Computer, Even limited features

“Offices in
35+ Locations
around
the World”

Advertisements Data sale
Revenue
$2 Billion $300 million
>$2.3 billion in 2018

Twitter Stock Performance
The increase in revenue did not translate to an increase in stock price until 2018

In 2018, Twitter Recorded its first Profit!
This was attributed primarily due to restructuring efforts by Jack Dorsey
It was a largely cost cutting venture.
Investors were at ease.
Twitter announced further projects which presented investor with measures that were not cost
Stock Price reduced by 7.7%

Questions
1. What does a PESTEL analysis suggest for the macro-
environmental impact on the social media industry? Which of
the macro-environmental factors appear to have the greatest
potential impact on Twitter? Why?
2. Identify the driving forces in the social media industry? What
appears to be the impact of these driving forces on the
industry?
3. Prepare a SWOT analysis for Twitter. What does the SWOT
suggest for Twitter’s future?
4. Using the data in Case Exhibits 1 & 2, what is your
assessment of Twitter’s financial position? Based on your
analysis, what financial performance can reasonably be
expected in the near-term future for Twitter? Support your
answer.
5. From the data provided in the case (Exhibits 1, 2, 6 & 7),
how does Twitter’s performance stack up with Facebook and
Snap? Is there a clear winner based on your analysis?

Social
Media
Legal
Factors
Political
Factors
Environment
al Factors
Technologic
al Factors
Social
Factors
Economi
c
Factors

Political Factors
Unfavorable Political Policies such as repealing Section 230 which was put in place to get rid of
pornography from the internet
Has given a lot of power to the technological companies allowing them to remove content they
did no deem good enough for their platform.
Sequel to the events of 2016 with Cambridge Analytica and Twitter Suspension and Flag
checking of the President of the United states account there has been increased calls from both
sides of the aisle to remove section 230 in a bid to limit the power of these social media
companies.
There is also growing concern on how internet companies use the data that is supplied to them
and those that are taken without explicit knowledge of the customer, This concern has been
translated to calls for the abolishment of personal data collections by social media companies that
is used for targeted advertisements and sold for profits.
There was even recent call in the past election from democratic candidate Andrew Yang asking
for the payment for the use of personal data.
If these laws come into effect, the profit margins and thus growth potential for these industries
will be reduced by great extents.
87%

Economic Factors
47%
Generally, When the economic factors are booming, they are growing this tends to be attributed
to increasing job market and having far too many people working, when this occurs people will
have less time to spend on social media since they would be at work, the effect will be
minimal since they will still be able to carve up a little bit of time to scroll their feed, However
social media companies thrive on engagement and time spent. A booming a prosperous economy
will naturally translate to smaller time spent on social media which provide an issue because the
thriving economy will translate to greater disposable income for the users of social media, They
will more likely click on advertisements and shop with what they see on social media, social
media companies need to find a way to balance out this need.

Social Factors
There is growing concern about the amount of time spent on social media, Many have attributed
it to increased loneliness and
Reclusiveness among youths.
People are trying to spend less time on social media in order to spend time with family and
friends instead.
Social media tends to expose younger people to extremely harmful vices and scenes that scars
them for life, The response to this kind of content is increasingly rapid however this delay is
still very problematic as the harm might already have been done just like the incident when the
murder of a senior was broadcast live of Facebook and A young girl died while doing a viral
challenge from TikTok.
All of these are sources of concern however more specifically to this year and last, When the
pandemic struck, people were forced home humanity was faced with a growing need to socialize
and social media was there to answer this call this would have resulted in increased usage.
58%

Technological Factors
Technology is the largest driver of social media as Technology provides the framework through
all their systems operate and develop, Technology allows the companies react to changes in the
society and provide for those needs such as with google who developed a software to compete
with Zoom called googlemeets.
Technology allows social media companies to diversify their portfolio of activities as they could
branch out into other information technology sectors such as Facebook that started as simply a
social media company but now offers Hardware such as the Oculus Headsets and the Facebook
Portal along with a congress blocked attempt at creating their own Libra currency.
Technology is vital to the evolution of every social media company. It lets them integrate better
features and functionality to their software.
98%

Environmental Factors
Social Media companies are not extremely reliant on the physical space for their jobs as most
of it is on computers and involves writing code, The pollution they will add to the environment
will be from powering up their server stations.
In comparison with industries of similar size, Their pollution is much smaller.
2020 revealed that many of the social media jobs can be teleworked as a result of this Twitter
allowed its staff to work from home indefinitely, this is likely to become a trend for many other
social media companies.
This will reduce their reliance on physical space to do their job and consequently lower pollution
on less commute to work from their staff.
22%

Legal Factors
Social Media companies have been in a lot of hotwater because they have not being able to
do much work to prevent the illegal therefore unauthorized use of copyrighted work.
Social Media companies have also witnessed an increase in the number of lawsuits brought
forward to them, some concerning account suspension that was interpreted as biased and against
free speech and a violation of their first amendment rights. Many people claim they are being
censored on social media examples like Laura Loomer and PragerU.
60%

Biggest Impact Macro-Environmental
Factor
Political
Factors

Political Macro Environmental
Factors
Repealing Section 230: This will reduce Twitter's oversight
power.
Data Sale Banning/restructuring: Twitter makes over $300
million from data sale alone, if this is stopped or
restrictions are made that limit this they will make much
less money. Additionally, Data that is collected is fed into
a software that is used to make targeted ads, thereby
increasing chances of clicks. If they lose access to this
data they will not have anything to feed the software and
miss out in a lot of possible sales.
Political Involvement. Twitter was extremely transformational
during the trump presidency as it became the mouthpiece
of the most powerful man in the world. He will abuse this

Factors
Twitter has been the predominant go to service for
promoting civil action and protest, examples of this
being the black lives matter movement, the #EndSARS
movement and #FreeBOBIWINE.
Communication for these protests trace their origins to
Twitter and Twitter support in not shutting down the
conversations and even providing special widgets and
the Twitter CEO endorsing the EndSARS movement
caused a Nigerian Lawmaker named Adamu Garba to
file articles suing him for a billion dollars and requiring
him to set up offices in Nigeria for his platform to be
used in the country.
This kind of shakedown is going to be expected in
the future with Twitter being a go to service to

Factors
Twitter has not been able to penetrate the Chinese
market as a result of restrictions and regulations by
the Chinese communist party barring many foreign
applications and social media companies.
If these laws did not exist, the Chinese market will be
extremely exploitable and a valuable investment.
There has been growing concern over Twitter
Censorship and Twitter leadership leaning to the left,
This has caused people on the right to believe they
are being oppressed and their first amendment rights
are being violated, leading to lawsuits and questions
about this sort of behaviour.

Factors
The spread of this right-wing oppression message and
the supposed left leaning of Twitter leadership has
created a market for alternative social media website
where right (republican) groups can thrive in without
the fear that their free speech is under attack.
This has caused a mass exodus of users from Twitter
to Far-Right centered social media alternatives like
Parler, Gab, MeWe e.t.c.

70%
Covid-19
There is a greater need to use social
media to catch up with friends and
family hence during the pandemic
there would have been an increase in
the use of social media thereby
growing their industry

Technology
70%
Technology is the largest driver of social media
as Technology provides the framework through
all their systems operate and develop

Interaction
Interaction drives social media, without interactions it would
not be social and the target base will not be there.

Strengths
1. Strong Brand Recognition
Recognition
2.Celebrity Power
3.Quick and Easy Content
Content
4. Simple to Use
Weakness
1. Smaller Users base in
comparison to other Major
Players
2. Limited Features
3. Niche Like Status
4. Narrow Market Scope

Opportunities
1. Diversification Potential
2. Increased Individualism
3. New Exploitable Market
4. Creative Innovation
Threats
1. Repealing Section 230
2. Unfavorable Data Laws
3. New Competitors e.g. Parler,
Gab

Twitter has been growing in popularity and this star
translating into growing ad revenue and more sign u
Twitter growth has left twitter with a health financial
Performance as shown in the chart on the left show
Revenue since 2014, it has been growing consistent
This performance is expected to be sustained and c
growing because Jack Dorsey is back as CEO and
Commenced a wave of restructuring agendas that ha
More features to the twitter app and increased their
Civil action thereby increasing their publicity and repu
It is expected that this new leadership will be a su
Jack Dorsey also runs another Fin-Tech Company th
extremely well which is Square. It is expected that
The techniques that have been proved successful at
Twitter.

Twitter Just like the other companies is growing in financial performance, however
benchmarking against Facebook is not right.
Facebook offers much more services such as Hardware Like Oculus, Instagram and
Whatsapp.
Snap does not offer the same services as twitter though they have the same business
model, one that involves advertisement and data sale
Snap also offers more than this since they sell wearable.

Clearly, Facebook is the winner since they quickly
diversified acquiring other companies that would have
been major competitors early on and expanding the
functionality of their web app such that there is something
for everyone

Twitter inc in 2018

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