Twitter ’s Money Move: Will Partnering With Square Boost Their Social Media Game?

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Things have been looking rocky lately for Twitter, as the company failed to meet growth expectations, and Twitter’s CEO Dick Costolo stepped down, leaving the company in the hands of Square founder and CEO Jack Dorsey in the interim. Without the same kind of popular cache as Facebook, or the undeniable force of Google, Twitter needs to reevaluate its strategy to make the kind of gains that’ll keep the company on the radar. But what’ll that look like?

With Dorsey at least temporarily at the helm, many have been hinting at the possibility of a Twitter and Square merger. And, with Square also falling behind in the online payment industry, combining the two might just give both the momentum they need to start grabbing headlines again. As Lior Ronen of Amigobullspoints out, “Both companies could benefit substantially from such a move, in light of their competitive difficulties and business stagnation.” Stagnation’s the enemy of any social media outlet.

Twitter ’s Growth Troubles

As the social media scene grows, different networks appeal to different sub-markets. Facebook’s scored big with just about everyone. Pinterest aims for a somewhat older demographic. Tumblr’s audience seems to be getting younger and younger.

But, what about Twitter? Twitter’s had significant staying power, remaining an active force among social media users, and it’s popular among a wide variety of users, from pop stars to academics. However, none of this has been enough to keep Twitter at the fore. They haven’t totally tanked like Secret (have you even heard of Secret?). However, “I need to tweet about that” also isn’t most people’s response to an exciting moment. Rather, Twitter is just hanging on with stalling numbers.

In response to Twitter’s stalling growth, the company, according to Inc. reporter Jeff Bercovici, has attempted to redefine what growth means. He’s skeptical, however, of whether this strategy will work. Trying to measure growth in terms “of audience, not actively engaged users” could be a slippery slope. Not to mention, this redefinition is a one-time fix to what seems to be an ongoing problem for Twitter.

Square’s Boom and Bust

We’ve all seen the infamous Square. It’s become the ideal transaction method for tag sales, famers’ markets, and indie retailers of all types. Whereas, before, these might have been cash only spaces, Square offered the convenience of debit and credit to a wider audience. And, what’s more, as GrowthHackers points out,this solution was an elegant one, in line with Apple’s style and method.

This all got Square off of the ground to great success, but the thing is, once integrated into a wide variety of systems, there hasn’t been a lot of room for growth. Rather, Square has run up against a wall. With no big growth showings, and Square’s CEO now working with Twitter, a merger seems like the logical next step.

The Pros of Partnership

It remains to be seen what a Twitter and Square merger might look like, and, in fact, it may be more of a strategic alliance than a concrete merger. One way or another, though, these two companies can do better together. In particular, a Twitter and Square alliance presents real opportunities – particularly for small retailers.

Part of what makes Twitter a great space for smaller businesses is that it hasn’t succeeded with a Facebook style “pay to play” strategy that can price small companies out of the running. Indeed, Larry Alton points out that, while everyone needs a Facebook, it maynot be the most meaningful marketing space for smaller businesses for this very reason: without the money, no one will see your posts. But, by giving Twitter a money management system via Square, it opens up room for smaller companies to fund visibility in this less popular venue, where less money is needed to compete.

If Twitter, partnered with Square, can bring on small businesses as a revenue source and a foundation for growth, both companies may have found a solution to their current woes. Right now, a merger may not be likely, but if both parties can begin looking at ways to bring their interests into alignment formally or strategically, it could bring both companies out of a slump.

Larry Alton (@LarryAlton3) is an independent business consultant specializing in social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.

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