Media

How Can Twitter Forecast 2020 Results?

In one of the most audacious recent acts of any large public company, Twitter Inc. (NYSE: TWTR) forecast numbers for 2020. A great deal can happen in six years, so the predictions are useless.

According to Bloomberg:

New CFO Anthony Noto used his presentation today to spotlight Twitter’s ambitions. He showed charts that displayed Twitter with an audience of 2 billion in 2020, along with $14 billion in annual revenue 10 years after hitting $1 billion.

Over that period, there are dozens of things that could block such a rapid expansion.

Among them:

Twitter could be acquired by a company which might have strategic plans very different than those stated by senior management.

Another large social media company which might be Facebook (NASDAQ: FB) might successfully launch a competing service.

Twitter’s advertising based model may go out of vogue with marketers, if it was ever in vogue at all.

Twitter’s user services which might include paid products like video rental, or a large library music service face tremendous competition from larger rivals which include Amazon (NASDAQ: AMZN).

Twitter’s membership could stop growing, or even shrink, if people online find the service is no longer as useful as it has been for the last several years. There is already evidence that many your people have stopped their ravenous appetite for social media.

A recent Pew social media survey showed how large a hill Twitter has to climb:

Overall, 42% of online adults use two or more of these social networks, while 36% use only one (the remaining 22% did not use any of the five specific sites we asked about). Among those who only use one major social networking platform, 84% say that Facebook is the single site that they frequent. However, other “single platform” social networking site users have adopted a site other than Facebook as their platform of choice. Among those who use just one social networking site, 8% use LinkedIn, 4% use Pinterest, and 2% each say that Instagram or Twitter is their sole social networking site.

Twitter already may have begun to be irrelevant. Under the circumstances, forecasting to 2020 is absurd.

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