Twitter Inc. Management Talks Project Lightning, User Growth, and More
These are some tumultuous times for Twitter . Compared to year-ago levels, the stock price is down about 48% as the market rethinks the social media company's growth potential amid slower user growth and a CEO search. It's a great time, therefore, to get an update from management -- and that is exactly what investors got earlier this week.
Twitter headquarters. Source: Twitter; photo by Aaron Durand (@everydaydude).
Here are a few takeaways from Twitter CFO Anthony Noto's Sept. 16 interview at Deutsche Bank's Technology Conference.
What is Project Lightning?One of the most prominent topics among investors recently regarding Twitter (other than the company's high-profile CEO search) is its "Project Lightning," a new tool the company is readying for release later this year that's aimed at making Twitter easier to use and help the service attract more new users.
But what's Project Lightning, exactly? Here's the most recent description of Twitter's not-so-secret project, straight from Twitter's CFO:
Twitter is about to launch a huge advertising campaignIf you're watching Twitter's sales, general, and administrative expense line on its income statement, expect it to trend upward in the coming quarters. The company is preparing its biggest marketing push ever.
Image source: Twitter.
While Twitter acknowledges its product currently isn't simple enough to attract and retain enough users to become a mass-market social media platform, it also admits part of the reason for its slower user growth is a failure to communicate its value to potential future users. But this is about to change.
"We've hired a creative agency, television advertising agency. We've hired a digital agency," Noto said. "We're working on an integrated campaign behind Project Lightning."
Twitter will invest heavily in video marketing, with an emphasis in television ads, Noto said:
Project Lightning won't scare away enthusiastsWhile investors are eager for Twitter to address its recent slowing user growth, shareholders are also hoping management will be very mindful of its 316 million monthly active users already using the service -- particularly its most avid users. After all, Twitter's most active users have likely played a large role in driving its rapidly growing advertising revenue as their activity helps attracts marketers.
Noto addressed this issue when he talked about how Project Lightning won't disrupt the experience enthusiasts have come to love:
Why user growth may have to wait a few quartersWhen can investors expect user growth to reaccelerate? Noto reiterated commentary provided during the company's second-quarter earnings call about how investors shouldn't expect faster growth immediately, and then he added:
In other words, investors shouldn't expect user growth until Twitter launches Project Lightning and starts playing ads on television.
For Twitter shareholders, the full interview is worth tuning into. Sure, Noto failed to address the elephant in the room when he declined to talk about the company's CEO search. But there were a handful of helpful topics discussed, along with the key items covered in this article. Investors can find the interview on Twitter's investor relations page on its website.
The article Twitter Inc. Management Talks Project Lightning, User Growth, and More originally appeared on Fool.com.
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