Media and tech analyst Richard Greenfield of BTIG came by Business Insider to discuss the future of television, ESPN, Snapchat, and Twitter with executive editor Sara Silverstein. Here he explains why he is one of the few people bullish on Twitter. He says the company has been innovating and has something to offer to a potential acquirer. Following is a transcript of the video.
SARA SILVERSTEIN: Why do you like Twitter so much?
RICHARD GREENFIELD: I think I’m the only person that likes Twitter.
SILVERSTEIN: I think you might be.
GREENFIELD: Twitter is — I think, Twitter, the most important thing to think about is that Twitter didn’t innovate for eight years. If you really look at the product, it really hadn’t changed. If you look at it originally. I don’t know if you were that early of a user.
SILVERSTEIN: Because you were talking about the algorithm.
GREENFIELD: But it also hadn’t, the actual — what it looked like hadn’t changed a lot. The syntax wasn’t easy to understand. They made it hard to understand what Twitter was. You could go on to it and see the Tweet from a second ago but most people. Probably the two of us may care about what happened a second ago but my mum doesn’t care about what happened one second ago. She cares about what’s interesting over the last four hours since she may have checked it. Now they’re delivering an algorithmically ranked feed, showing you stuff that you should be interested in, making the syntax easier. Just the little mark to show a reply with an arrow. Now it’s a speech bubble. They’re syntax that makes it more understandable.
They had a mobile web product that was pretty terrible. Now they have a mobile web product that is basically a mobile app on the web itself.
SILVERSTEIN: And is it helping already?
GREENFIELD: You’re seeing user growth has grown from — basically flatlined for three years on it. So daily active users, the metric of what matters the most — I mean, how many people are using Twitter every single day? It’s relatively flat for three years. It’s now growing mid-teens. So things are getting a lot better from a user standpoint. Revenues are still under pressure. That’s why the whole — I think that’s why Wall Street generally hates it, have left it for dead. Usually things on the internet, once they start declining, they die. Then often somebody buys them. Think AOL and Yahoo.
But the reality is, it’s hard to come back. Moving daily active users up mid-teens after it stagnated for so long is a real accomplishment. Every media company that we were just talking about over this discussion is struggling to find: 1. A way to have a direct relation with consumers 2. Data on consumers, on who they are, and 3. A mobile presence. Twitter solves that for lots of companies in the media space who don’t have any mobile strategy and don’t know how to talk directly to consumers.
SILVERSTEIN: And you think that that’s what’s possibly going to happen? That they might be acquired.
GREENFIELD: I’d be shocked if Twitter is a public company in two years.
SILVERSTEIN: Who would be most benefitted by having Twitter as part of them?
GREENFIELD: I think anybody who is in news, sports and information. I mean, we were looking at the TV before this started and you think about all the world politics and news and information, sport. I mean, clearly sports talk radio plays out on Twitter every single day.
If you’re a sports fan, you’re following the beat reporters, you’re part of that discussion. So I think it’s companies that are highly vested in news and information, so whether that’s Disney, maybe it’s Comcast with NBC, maybe that’s AT&T, DirecTV, CNN, the whole complex.
SILVERSTEIN: Where live matters.
GREENFIELD: Yeah. It could be Google. I mean from a data standpoint, it can be companies like Microsoft. I think there’s a wide array of potential acquirers. But the reality is first things first: Twitter’s got to start growing revenues again and proving to people that user growth translates into revenue growth. It’s going to take a few quarters but the story is getting better. Wall Street’s avoiding it. That’s great. We love things that have been left for dead, that everybody hates and where we think there’s actually data points that show things are getting better. Twitter is that.
And I think people are — Twitter’s becoming more useful. I mean everything that touches news. I don’t know your metrics for Business Insider but if you look at anything that touches news and information right now, talk radio, you look at podcasts, you look at newspaper sales online newspaper sales, you look at CNN and MSNBC. I mean everything that touches news and information is surging.
Twitter is the definition of news and information on a mobile device. I think Twitter is in a very good position. Trump certainly doesn’t hurt but I think the overall thirst for information on mobile devices is a nice tailwind. It wasn’t a tailwind when they had a crappy product but the product has really gotten better.
People are finding it easier to use and they’re spending more time there, once they’re there because they’re showing you the stuff that you should see. And that’s the fundamentally biggest change. They’re actually using data and AI, artificial intelligence to show you the right Tweet at the right time.
SILVERSTEIN: And you have a price target of $US25 on Twitter right now?
GREENFIELD: We do. Twitter’s our favourite. We love Twitter.
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