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Science & Technology

Twitter Faces Challenges As It tries To Balance Profitability, Popularity

STEVE INSKEEP, HOST:

Twitter surprised Wall Street by announcing better-than-expected earnings yesterday. Earnings were not expected to be so good because the company faces challenges. The question is how to take a medium that's all about what's happening right now this very second and keep it sustainable. NPR's Laura Sydell reports.

LAURA SYDELL, BYLINE: Unless you've been living on a deserted island, you've probably heard of Twitter even if you haven't used it.

CHARLENE LI: It's a little bit sort of the inside baseball when it comes to using it. So a lot people know about it but don't know how to use it.

SYDELL: Charlene Li, the principal analyst at Altimeter Group, is a regular Twitter user. But even she says sometimes she finds all the abbreviations designed to help squeeze content into Twitter's 140-character limit confusing.

LI: What are all these @ signs for people? Are they important? Should I be looking at those? What's a hashtag or i-c-y-m-i? What does that mean?

SYDELL: Li thinks if Twitter wants to grow, it's going to have to be simpler to understand. During the earnings call yesterday, co-founder and interim CEO Jack Dorsey said he plans to make Twitter as simple as looking out a window to see what's happening. He emphasized plans to use human curators to sort out the best tweets. But, Li says court users have come to love the open format.

LI: You've got to keep the old guard, the people who made Twitter what it is today, happy while at the same time attracting a new people to as well.

SYDELL: Twitter needs more than just new users, says analyst Rob Enderle. Twitter's short format has made it very hard to make real money from advertising, which is its primary source of income.

ROB ENDERLE: It's very hard to pitch somebody a product in that two-line, one-, two-sentence format. You just don't have the room. And if you go crazy, then people stop using the service, and so your user counts go down. And of course, if your user counts go down, you're doubly screwed.

SYDELL: Enderle thinks Twitter would do best to create some kind of alternate platform.

ENDERLE: And then keep the Twitter site going as part of an ancillary business. But to continue to try to pound Twitter to try to get it to be something that it's not, I'm not sure anybody's going to be able to do that.

SYDELL: Twitter is now seeking a new permanent CEO. Whoever gets that job is going to have to come up with a plan, and it's likely to be a lot longer than 140 characters. Laura Sydell, NPR News. Transcript provided by NPR, Copyright NPR.