Tech Newsround – Twitter Q4 & the Metaverse

Twitter Q4 2021 – Social graph.

• Twitter has managed to avoid the depredation of Apple’s privacy features underlining that while Twitter is a niche offering, it executes on that niche extremely well.
• Q4 2021 revenues / EPS were $1.57bn / $0.21 broadly in line with estimates of $1.57bn / $0.16.
• Guidance was also in line with expectations with revenues of $1.26bn forecast for Q1 2022 while the 2023 forecast of $7.5bn in annual revenues and 315m DaU’s was reiterated.
• This will take some doing as the audience will need to expand by 45% but at the same time, the company is doubling the share repurchase program to $4bn.
• This is usually a sign of a company approaching maturity and slower growth and so I wonder whether the company really believes that its 2023 targets will be met.
• It looks like the market has the same question as the shares bounced around quite significantly before ending up little changed.
• Either way, the good news for Twitter is that it has escaped the impact of Apple’s changes to how iOS apps track their users.
• This is because Twitter’s core asset is its social graph which is created by what its users follow.
• This is completely independent of app tracking and allows Twitter to accurately target the advertisements that it sells on its service.
• Twitter remains unable to break out of its niche in microblogging and I think that an assessment of its shares needs to be made on that basis only.
• This is where I struggle as the shares are, even now, priced for growth that may well never materialise because that would require an expansion beyond its current niche.
• Hence, I still do not see any real value in the shares and will continue to avoid them.

The Metaverse – Teething problems.

• Samsung has just clearly demonstrated how early the technology around the Metaverse is even before one starts to think about head-mounted displays.
• Samsung recently held an event in the Metaverse to launch its new smartphones but a good proportion of the audience could not find the venue and another proportion could not get in once they had found it.
• The event was held in Decentraland which is a cryptocurrency-focused virtual world that is currently accessed via web browser as opposed to a VR headset.
• Samsung had created a virtual building in Decentraland called Samsung 837X which was a replica of its New York experience center.
• Many users could not find the building while many others could not gain access to the building once they had found it.
• The reason for this is most likely to be their location which determines which server one logs onto which in turn may have the building in its version of Decentaland and may or may not have access to it.
• I have experienced similar issues with VR demonstrations and it is clear that there is still huge amounts of work required before the Metaverse even approaches anything like a decent user experience.
• This is another demonstration that the Metaverse is currently at a similar stage of development as the Internet was when academics were pinging each other with their desktop computers for fun in the 1980s.
• RFM research (see here) has found that these issues are going to take a long time to fix and that it will be 2030 or later before the Metaverse has any hope of taking over from the smartphone.
• The Metaverse is the next big opportunity for disruption in digital ecosystems but crucially, Apple, Google, Microsoft, Meta and so on have plenty of time to work out how to avoid becoming the Nokia of 2007.