LIZ: KIND OF INTERESTING HOW YOU
CAN FIND BACK DOORS INTO WHAT
DRIVES EARNINGS.
WHICH COMPANY MIGHT HAVE
BENEFITED THE MOST FROM THAT
>> 72,000 TWEETS PER MINUTE AT
THE END OF GAME ONE WHEN J.R.
SMITH DRIBBLED OUT THE CLOCK
INSTEAD OF TAKING A SHOT.
LIZ: A STUPENDOUS NUMBER OF
TWEETS IN AN NBA GAME DOES NOT
TRANSLATE INTO STOCK GAINS.
TWITTER IS GETTING HAMMERED AT
THIS HOUR.
IN FACT, ALL DAY LONG.
THE THE MICROBLOGGER DOWN NEARLY
20%.
THIRD CONSECUTIVE QUARTERLY
PROFIT.
LET'S BRING IN A FOX BUSINESS
EXCLUSIVE WITH WEB BUSH
SECURITIES MANAGING DIRECTOR.
WHAT HAPPENED?
I MEAN, TWITTER IS GETTING HIT
PURGE -- TRIED TO PURGE SOME OF
THESE FAKE USERS?
>> WELL, OBVIOUSLY, THAT'S
WEIGHING ON THE STOCK.
YOU KNOW, THE LACK OF GROWTH, AS
YOU POINTED OUT, IN THE JUNE
QUARTER REALLY DIDN'T HAVE
ANYTHING TO DO WITH THE PURGE.
COUPLE MONTHS AGO THAT DIDN'T
THE MOST RECENT PURGE WAS IN
JULY, AND THEY ACTUALLY SAID IN
THE EARNINGS LETTER -- AND THIS
IS WHY THE STOCK'S DOWN -- WE
EXPECT SINGLE DIGIT MILLIONS OF
I LOST 2% OF MY FOLLOWERS, SO
I'M GOING TO THE ASSUME THAT'S
THE PROXY.
IF THEY PURGED 7 MILLION AND
THEY'RE NOT GETTING ANY BACK,
THEY ARE NOT GROWING, AND
INVESTORS DON'T WANT TO PAY FOR
STABLE, FLAT EARNINGS FOREVER.
SO WE HAVE TO COUNT ON
ADVERTISERS WARMING UP TO THE
SERVICE, DECIDING THEY WANT TO
BE ON TWITTER.
AND, FRANKLY, ADVERTISERS DON'T
UNDERSTAND TWITTER.
SO TWITTER HAS TO DO A FAR
BETTER JOB OF EXPLAINING THE
VALUE PROPOSITION TO
ADVERTISERS.
BECAUSE OF THAT.
LIZ: WHAT SURPRISES ME IS THEYEN
CAN'T GET THIS RIGHT.
DICK COSTOLO, THE FIRST MAJOR
CEO, AND NOW JACK DORSEY, WHY
CAN THEY NOT EXPLAIN THIS BETTER
TO ADVERTISERS WHEN THE
PRESIDENT OF THE UNITED STATES
IS CONSTANTLY USING IT?
IF YOU WANT TO BE UP-TO-DATE ON
EXACTLY A WHAT HE'S THINKING,
JUST FOLLOW HIM ON TWITTER.
AND THEY CAN'T SEEM TO MONETIZE
DISCLOSE DAUs, SO IT'S REALLY
ANNOYING THEY KEEP TALKING ABOUT
THE PERCENTAGE GROWTH, BUT THEY
WON'T GIVE YOU THE UNDERLYING
NUMBER.
AND THE FACT IS THE NUMBER'S
LESS THAN 50% OF THEIR TOTAL
MONTHLY ACTIVE USERS, SO NOT
IMPRESSIVE AT ALL.
FACEBOOK'S MORE AT LIKE 70%.
THESE GUYS ARE REALLY NOT THAT
USERS.
SO I THINK USER GROWTH IS THE
SHOULD BE THERE BECAUSE THEY
WOULD KNOW ABOUT BREAKING NEWS
ON FOX BUSINESS NEWS --
SEE THEM GROW.
[LAUGHTER]
AND YET NONE OF US DO A VERY
GOOD JOB OF PROMOTING THE SITE
TO OUR FOLLOWERS.
YOU KNOW, OUR FOLLOWERS ON
TWITTER, YES.
TWITTER, NOR DO THEY CARE.
LIZ: WELL, WE SHOW THIS ON THE
SCREEN, BUT I HAVE TO POINT OUT
THE STOCK THOUGH.
THIS WAS WITHIN THE PAST 52
WHAT, MICHAEL?
CLEARLY, THEY WERE DOING
SOMETHING RIGHT WHERE PEOPLE
LIKE THIS.
>> WELL, THEY HAD SEEN SEVERAL
QUARTERS OF REVENUE DECLINE
YEAR-OVER-YEAR, AND THEY FINALLY
SO INVESTORS EXTRAPOLATE THE TWO
MOST RECENT DATA POINTS AND
ASSUME THAT'S GOING TO CONTINUE
FOREVER.
THAT STALLED, AND THAT'S WHY THE
STOCK THIS QUARTER GOT HIT.
IT'S GOING TO STALL AGAIN NEXT
QUARTER.
AND THAT'S NOT EXCITING.
LIZ: DOES ANYBODY BUY THIS
THING, AND -- THEY HAD THEIR
MOMENT, BECAUSE THIS WAS $15.
NOW IT'S WAY MORE EXPENSIVE.
I MEAN, IT'S REALLY RIDICULOUSLY
CRAZY, BUT I KEEP HEARING ABOUT
SLACK.
SLACK IS IN THIS AGGREGATOR
WHERE YOU PUT EVERYTHING
TOGETHER, ALL YOUR MESSAGING
SYSTEMS.
SLACK MADE TWO ACQUISITIONS
RECENTLY.
IS THIS THE NEXT HOT THING, AND
I DON'T KNOW IF THEY'D EVEN HAVE
THE MONEY TO BUY MANAGER AS BIG
AS TWITTER TWO, BUT WHO PICKS UP
TWITTER?
>> SLACK DOESN'T HAVE THE MONEY,
AND THE ONLY COMPANY THAT I
THINK ACTUALLY HAS A STRATEGIC
REASON FOR OWNING THEM IS
FACEBOOK.
I MEAN, I THINK FACEBOOK WOULD
THEY REALLY HAVE AN ANALOGY TO
IT, AND I THINK IT MAKES PERFECT
SENSE.
DECIDING THEY WANT TO BE BIGGER
AND MAYBE SPENDING THE MONEY,
BUT I NEVER WOULD HAVE CALLED
MICROSOFT AND LinkedIN.
YOU NEVER KNOW.
BUT IT HAS TO BE A COMPANY ON
THAT SCALE.
IT'S NOT GOING TO BE A MEDIA
COMPANY, IT'S NOT GOING TO BE
DISNEY, IT'S NOT GOING TO BE
AT&T.
SO, YOU KNOW, IT'S GOT TO BE ONE
OF THE SOCIAL MEDIA GUYS OR ONE
OF THE CLOUD GUYS THAT HAS A LOT
OF CASH AND IS LOOKING FOR AN
ENTRY INTO THIS TYPE OF A
PLATFORM.
LIZ: SO LET'S SAY YOUR GRANDMA
OR YOUR MOM SAYS, MICHAEL,
SHOULD I BUY TWITTER RIGHT NOW
I'M AN ORPHAN --
[LAUGHTER]
LIZ: MINE TOO.
>> IT'S NOT FOR THE FAINT OF
HEART.
I DON'T THINK THIS IS A WIDOWS
AND ORPHANS STOCK.
I THINK THAT YOU'RE TAKING A BET
AT $PA 35 WHETHER THIS THING
REALLY GOES UP OR GOES DOWN.
HE DOES NOT SEEM TO THINK THEY
NEED TO CHANGE ANYTHING.
I THINK THE WAY TWITTER BECOMES
VALUABLE IS IF THEY START
FOCUSING ON PEOPLE WHO AREN'T
THEY'RE NOT DOING THAT.
LIZ: WELL, WE KEEP ASKING FOR