Investors Embrace Twitter's 280-Character Limit, Users Revolt

On occasion over the years, I have called Twitter's (NYSE: TWTR) 140-character limit "arbitrary," which didn't make me any friends on the service. Debate surrounding this limit has been polarizing and persistent for years. Without fail, shares jump whenever even a rumor emerges that Twitter is considering increasing the 140-character limit, which has the potential to expand the appeal of the platform to mainstream users.

Last night, Twitter officially announced that it was finally experimenting with a 280-character limit, twice the current limit. The company notes that the limit has different implications across different languages, particularly Asian languages like Chinese, Japanese, and Korean, where characters are often entire words. That effectively allows those users to express more with fewer characters, so Twitter says the change is to help level the tweeting field across languages (Chinese, Japanese, and Korean users will not get the longer limit).

Twitter is now testing out the longer limit with a portion of the user base. This comes over two years after Twitter removed character limits from direct messages. Shares jumped in after-hours trading after the announcement, with gains continuing into today.

Investors want product improvements that make Twitter more approachable

The first sentence of the official blog post describes the whole reason why the 140-character limit is troublesome: "Trying to cram your thoughts into a Tweet -- we've all been there, and it's a pain." In announcing the change, CEO Jack Dorsey even called the 140-character limit arbitrary.

Stagnant user growth has plagued Twitter ever since it went public. Despite carving out a unique role in social media, the company has struggled in translating that into tangible value for shareholders. Every once in a while, Twitter can post strong monthly active user (MAU) figures, like it did in the first quarter of this year, but those gains are often fleeting: User growth slowed in the second quarter and the company actually lost 2 million MAUs in the core U.S. market. Twitter's ad business reflects its MAU performance.

Brevity has always been a justification for the limit, but users long ago figured out other, more verbose ways to express themselves. Namely, extended tweetstorms consisting of numerous tweets (which can be hard to follow), or sharing a screenshot or image of text. The prevalence of these practices suggest that some users would appreciate longer tweets. Twitter still has other problems, such as unchecked abuse and harassment on the platform, but addressing usability is long overdue.

Die-hard users like it just the way it is

Twitter reacted about how you'd expect: with sarcastic wit and some hostility.

Despite the vocal backlash on Twitter, the real test is whether or not the change will yield improvements in either user engagement or MAU growth. The change is unlikely to drive current users away, but has the potential to attract new users to the platform. That's how Twitter should gauge whether or not a 280-character limit is successful.

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Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.