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Twitter: Give Periscope Credit

Summary

Periscope's success is binary. Either it becomes the next Vine or the next YouTube.

Investors give Periscope virtually no credit, ignoring its potential.

If Periscope is successful, it can provide upside to Twitter's stock.

Twitter's (NYSE:TWTR) main issue ironically is perception. The perception is Twitter can't monetize its user base profitably and doesn't have the ability to accelerate user growth. This prognosis has become more accurate as time progresses sending the stock lower, but it can be changed. Twitter should take a page out of Periscope's playbook and tell us the total time spent on its website/app to give us a better picture of the health of the business. I think Twitter is afraid the truth could hurt its popularity if it shows a decline, but investors will appreciate the straightforwardness. It definitely took confidence for Periscope to do this because if there were any hiccups, it could have derailed the entire growth path.

Social Landscape

I have already gone over the fact that I was overly bullish on Twitter's prospects because I was bullish on Periscope. I still remain bullish on Periscope as I think it can be the next popular app after Snapchat (Private:CHAT). With the way apps burst onto the scene, it is only a matter of time when we see another one take the pedestal. Instagram has seen its perch lost to Snapchat and Snapchat will see the same happen to it.

We have seen this popularity rise and diminish with what I would call the off-brand social media apps which have one main function, but do go viral. The original app in this category is probably Vine. Vine would no longer exist in its current form if it wasn't for Twitter. The current leader of this pack is Musical.ly.

It is important to discuss all of these apps and learn from the way they trend to discover which apps have staying power and which don't. We also don't know the limit to the number of social apps teenagers are willing to use regularly, but we will get a better understanding in the future when we see whether Snapchat starts to limit the time spent on Instagram (NASDAQ:FB) (right now both are growing unencumbered by the other). It is a gross mischaracterization of social apps to put them in two buckets: Facebook or MySpace. These apps will all have different trajectories falling between these two drastically different destinations.

Periscope Is Given No Credit

We have seen Periscope burst onto the scene and grow like a weed ever since. In the midst of this Twitter's stock has cratered. I...


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