Twitter Inc. (NYSE:TWTR) Needs To Introduce New Metrics In Order To Capitalize Its Passive Users’ Base

Twitter Inc. (NYSE:TWTR), a social media website that almost everybody knows about, posted its earnings report for the second quarter on Tuesday, August 5, 2014. The site reported a strong growth in its MAUs (monthly active users), a huge growth in its profits and increased revenue from the timeline views. All these pointers indicate to a better and brighter future of the company.

The shares of the company rose up by as much as 35 percent as soon as the news of its earnings hit the market. Stocks of Twitter Inc. (NYSE:TWTR) saw a huge decline in the early part of the year; however, the shares of the company jumped up on Wednesday, during the early market trading, and settled at 25 percent.

The chief executive officer of the company, Dick Costolo, on August 5, 2014, included passive users in its marketing and advertising estimates. Costolo said that there are millions of users who visit Twitter every day but do not log in to the website. He announced that the number of these occasional visitors is far greater than Twitter Inc.’s (NYSE:TWTR) 217 million regular MAUs. According to Costolo, the monthly active users, together with the passive users, make the company one of the largest audiences worldwide, connected through the digital strings. The CEO further said that the company is trying to run tests on the Twitter experience of these passive users in order to make them join Twitter Inc. (NYSE:TWTR) and further improve the numbers.

Twitter Inc. (NYSE:TWTR) needs to stay in the game by designing a strategy to increase its revenues every time its content appears on mobile apps, television or websites.

The number of monthly active users of Twitter Inc. (NYSE:TWTR), one of the standard industry metrics that had been designed to check the performance of the company, is not very good right now. In fact, the company has reported lower MAUs than the number that it had predicted earlier, and it will not be wrong to say that the company comes in the second category, lower than the first category that contains Facebook.

Only 15 percent of the United States public uses Twitter Inc. (NYSE:TWTR), but the site’s journalism content is widely being used by the non-users as well. According to a report released by BTIG Research, Rick Greenfield noted that the number of people who consumer Twitter journalism content, through other sites, has been increasing at a pace 10 times higher than that of the regular MAUs.

Now, Twitter Inc. (NYSE:TWTR) has to convince the advertisers that the passive users and those users, who end up consuming Twitter’s material from other sites, are a strong reason to increase the charges. Nonetheless, it is not certain as to when the company will be successful in monetizing its share from the passive users.

Rumors have it that the company is trying to come up with some new metrics in order to capitalize the occasional visitors. However, that does not mean that the new standards will be able to capture more ad money from the existing user base, since reach alone cannot increase revenues: the company needs to reach to an agreement with the publishers, advertisers and consumers.