Friday, October 28, 2016

Twitter Inc. to Shut Down Vine and Lay Off Hundreds of Employees

Five years ago, Facebook and Twitter got into a battle over who would ultimately purchase Instagram. When the more-powerful Facebook ultimately purchased Instagram, Twitter took a risk and went for the unheard-of Vine app. In the short-run, Vine was a far cheaper investment and ended up with millions of users. However, now that live video streaming seems to be the way of the future. According to Paresh Dave, in his L.A. Times article, Twitter is being forced to stop all future development on Vine and cut approximately 9% of its workforce to make ends meet as their profits continue to decrease.

Vine is an app that enables users, especially those with comedic talent, to share short videos, limited to approximately 6 seconds. Many people have gained viral fame due to Vine, including comedians like Thomas Sanders and singers like Shawn Mendes. Unfortunately, even though Vine gained massive popularity, it only lasted a few years before users and advertisers realized that YouTube and other platforms would be more lucrative. As one analyst stated, there are too many alternatives for video advertising to have a successful app that limits clips to 6 seconds.

Vine isn't the only thing Twitter Inc. is getting rid of, though. In order to save around $100 million per year, even after severance pay, Twitter plans to lay off approximately 350 of its 3,900 employees. Unfortunately, analysts don;t believe that the cuts will be enough in the long run. While Twitter's revenue is up 8% from last year, in part due to advertisement sales, it is also showing a loss of over $100 million per quarter. Twitter executives seem confident that the addition of live-streaming capabilities will enable the company to be more successful in the future, but that remains to be seen.

One of the main problems that analysts have pointed out regarding Twitter Inc.'s business is that users are too limited. On, posts are limited to 140 characters, and on Vine, videos were limited to 6 seconds. Users don't like limits, especially when they are so small. At least on Snapchat, videos have a slightly longer 10-second limit, nearly double that of Vine. There has been some talk in recent years of Twitter raising their character limits, but as of yet, that has not come to fruition. Logically, longer messages and longer videos would have more space for advertisement, so if Twitter wants to stay competitive, it may have to adapt to the longer format used by most platforms.

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