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Would you bet on Twitter? No, says Forrester analyst following earnings report

Twitter must create a more diverse product offering if it is to appeal to a more diverse user, and satisfy marketers, according to Forrester analyst Anthony Mullen.

The social network failed to turn any profit in its latest set of financial results covering the second quarter from March to June – in fact, it reported an £86m loss, more than three times what Twitter reported over the same period last year.

Following Facebook’s earnings report, Mullen said that it would take a brave man to bet against Zuckerberg.

When questioned if he would say the same for Twitter, he replied "no", adding: “Certainly those that are advising on which shares to go on are saying, 'keep your shares on Facebook'.”

Reports have suggested that investors have been left concerned that Twitter is not growing fast enough, a worry Mullen said is justified.

“If you were being mean spirited you could say Twitter is just a 21st century telegram but there is a lot appeal in the simplicity,” he said.

However, when you compare Twitter to Facebook, Mullen said the latter has a greater diversity in the user base and advertiser tools, “ergo there are more experiences that can be created”.

“One of the problems for Twitter was that it was very hard lined on the use of its APIs. It really cracked down on who could and couldn’t use API and I wonder if it's stifled innovation there and it should have been a little more flexible to allow innovation on the platform,” he explained.

Unfortunately, Mullen said that this has left Twitter in a more precarious position in that it is prone to disruption and now needs to create a more diverse product offering.

“It's still not really delivering for brands here on marketing,” he stated, despite Twitter reporting a $277m surge in advertising revenue.

“One of the problems is that brands are using the platform for brand awareness and hoping they can use the platform to build their brands. But from what consumers tell us most brands they are engaging with are ones that are already customers,” he said.

“A lot of people use Twitter for customer service but it is a very unstructured affair at the moment. Perhaps they could look at what companies like Klout are doing to foster loyalty, to develop more tools for advocacy.”

He also cited Forrester research which found that only 44 per cent of marketers were satisfied with Twitter as a platform, and that 50 per cent were not confident they can measure their marketing efforts on the site.

“It could probably provide more guidance and education, supporting marketers a bit more,” he said.

Although Twitter reported a 24 per cent year-on-year increase in users to 271m, Mullen questioned how many of those were existing users who have created a second or third account.

“It doesn’t appeal to taxi drivers and grandmothers in the same way that Facebook does – it’s not about following groups or keeping families connected.”

“It’s good that they’ve increased monthly active users but I do wonder how many of those are duplicates and people with multiple accounts,” he said, “There will be lot of people, I’m certainly one, with multiple accounts who are being captured into that [figure] or a lot of corporate accounts that might appear like individual accounts.”

However, he praised Twitter for what it build around the World Cup and said that kind of activity shows the “emergence of an editorial voice” which the platform should focus on capitalise on with by introducing more products or services that users, brands and other organisations could harness.

Following Facebook’s earnings report, Mullen said that, despite advertisers being similarly unsatisfied with the platform, it would take a brave man to bet against Zuckerberg.