Twitter Rolls Out Expanded Shopping Pages
The recent shakeup of top management at Twitter Inc. (NYSE: TWTR) has dominated the company news for more than a week now. While that change is unquestionably important for the company, Twitter also has some other challenges.
The company’s stock plummeted by nearly a third when it reported first-quarter earnings in late April, and the shares have never recovered. Twitter’s then-new direct response advertising products did not perform well, and the company said it expected that tepid performance to last for the rest of its fiscal year. Revenue guidance for the second quarter fell far short of analysts’ expectations, and monthly active user growth was slowing down.
On Friday the company announced two more direct response products: product and place pages and advertiser-sponsored product and place collections. The new pages product surfaces and organizes relevant Tweets about products and places on dedicated pages. The collections are a way for people and brands to share products and places that are part of a manufacturer’s product line or an influencer’s collection of items.
Products can be purchased in Twitter or at the advertiser’s site. When the pages launched retailers and influencers were not paying Twitter for either the product or collection pages. The company said that it had signed up 41 different partners at launch time, including Apple Beats and Disney, and influencers like Demi Lovato and Ellen DeGeneres.
The most likely way for Twitter to turn these new ad products into cash is to take a cut of any sales made, but that is not happening yet. And that is one reason that guidance was so low when Twitter reported first-quarter results.
Friday’s announcement gave the company’s stock a boost of about 3.7% to close at $35.86 in a 52-week range of $33.51 to $55.99. The consensus price target on the stock is around $46.00.