Daily Ticker

The move that could save Twitter

What's wrong with Twitter (TWTR)? Its shares have plummeted almost 55% from its all-time high near $75 in December. Year-to-date, shares of Twitter are down 46%, while Facebook (FB) shares are up 15%.

Twitter risks becoming the next AOL, says Misiek Piskorski, author of the new book "A Social Strategy: How We Profit from Social Media."

Related: Will Twitter's earnings justify its stock price?

But there is hope for Twitter, Piskorski tells The Daily Ticker, if the company implements "quite a lot of changes."  For starters, Twitter needs a global strategy, he says. "Most of us in the U.S. have tried Twitter so now they need a new source of traffic."  

Related: No more Facebook? Mark Zuckerberg has a vision says Ben Horowitz

Facebook did that and now most of its traffic is coming from overseas, says Piskorski. Its WhatApp app gives it a "wonderful foothold in countries like India."

He says Twitter should target India  "one of the most fruitful opportunities." The country has about 250 million Internet users  the same as Twitter's total user base  and one billion people, but Twitter so far has tapped only about 33 million users in India.

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Twitter and other U.S.-based Internet companies also have to be concerned about Chinese Internet companies gaining a foothold in America. "Chinese platforms are just killing it," says Piskorski, referring to Alibaba (full disclosure: Yahoo has a stake in Alibaba) and Tencent (TCEHY).  "In a couple of years we might see them come over stateside."

Piskorski spent time in China last year researching its Internet for another book he's writing, and he found "the speed of innovation is incredible"  three times faster than in the United States.

"When I came back here, I got quite scared for our Internet," says Piskorski. "Our Internet is very orderly.  Everyone competes very nicely. In China, everybody competes with everybody on everything," so that when one company introduces a new app, other companies follow with their edition.

But, says Piskorski, LinkedIn (LNKD) has done well in China due to its link with Tencent  "a really smart move and it will pay very well for them."

But what about non-social media companies? How can they use social media to their advantage, which is the focus of Piskorski's book? He says non-Internet companies should use social media for selective products that fit well with certain applications.

"Companies that have done this really successfully have developed an add-on product that facilitates relationships between people, and use that for competitive advantage." One example: Nike+ (NKE)  an ecosystem "that connects runners to friends, runners to other runners and connects to Twitter and Facebook." Nike+ has helped boost sales of the company's shoes about 30% in the past couple of years, even though its advertising hasn't grown, says Piskorski.

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