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Twitter's (TWTR) Smyte Buyout to Strengthen Security Measures

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Twitter TWTR has taken several measures to improve safety and reliability of its platform in recent times. The company is now acquiring San Francisco-based “trust and safety as a service” provider, Smyte, to take the security measures a step forward.

Smyte tools are used to stop online abuse, harassment and spam and also protect user accounts. The company’s anti-abuse solutions effectively handle all types of online abuses by leveraging customized machine learning models.

Per TechCrunch, Twitter has already shut-down Smyte’s service for external clients. The company’s primary motive is to use Smyte’s intellectual property (IP) and talent to bolster the platform’s security features rather than generating revenues.

Twitter’s Security Measures Good for Users

The inclusion of Smyte will help Twitter combat abuse and bullying, the most obvious and pressing areas of concern for the social media platform in recent times.

Twitter, Inc. Price and Consensus

Twitter, Inc. Price and Consensus | Twitter, Inc. Quote


The company has been tightening security features ever since it, along with Facebook FB and Alphabet’s GOOGL Google division, faced severe criticism for spreading fake news that allegedly influenced the 2016 U.S. Presidential elections results.

In January, this year, Twitter stated that Russian trolls related to 2016 elections impacted at least 1.4 million users.

Twitter has been introducing stricter regulations to create a safer environment and repairing brand image. The company has introduced rules, under which advertisers running political ads have to provide evidence that they stay in the United States. Additionally, federal election campaign identification will have to be provided by candidates and committees.

Moreover, Twitter announced its support for Honest Ads Act in a bid to make its platform more transparent and viable.

In October 2017, Twitter declared that it will provide users with more detailed information regarding advertisements posted on the platform, especially political and issue-based campaigns. The company also recently joined forces with Facebook and Google to ban cryptocurrency ads from the platform.

Recently, Twitter unveiled new measures to improve user security by addressing the issue of abusive “trolls” on the platform. The social media provider revealed that instead of waiting for people to report such tweets, it will use behavioral signals to identify and limit their visibility.

Per Twitter’s lately released Transparency Report, more than 1.2 million accounts have been suspended since August 2015. Moreover, since Jul 1, 2017 to Dec 31, 2017, the company permanently banned a total of 274,460 accounts linked with terrorism.

Ad Engagements Improving

Twitter’s focus on live streaming as well as improving security measures have been attracting advertisers, of late. Ad engagements increased 69% year over year in the quarter ending March. Management noted that video ads continue to be the key driver and therefore it is expanding video-oriented content to attract more advertising revenues.

Notably, for 2018, the company has more than 30 new programs in the field of news, sports, entertainment and gaming.

The company signed a deal with Disney DIS, which will create Twitter-specific live sports, news and entertainment programming through the ESPN "SportsCenter" TV show, live stream ESPN's "Fantasy Focus Live" podcast, and produce content through the ABC broadcast network, the Disney Channels, Freeform and the company's movie studio.

The company entered into another agreement with Comcast, including NBCUniversal, which will be sharing live videos and clips from NBC News, MSNBC, CNBC and Telemundo. Other collaborations of Twitter included Viacom’s Comedy Central, MTV and BET, Hearst Magazines Digital Media, Will Packer Media, BuzzFeed News, and sports leagues including Major League Baseball and Major League Soccer.

Apart from the healthy programming slate, Twitter’s proactive stance in eliminating malpractices on its platform through strategic acquisition like Smyte is expected to drive top-line growth, going forward.

Twitter sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


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