NEW YORK (TheStreet) -- Twitter (TWTR - Get Report) is down almost 8% today. It's been a big move down since the news broke last week that Anthony Noto was joining as CFO and the stock was close to $42. It's around $37 now.
There is a lot of pressure on CEO Dick Costolo at the moment. Twitter's user growth remains pressured. But all is not lost.
The company made a significant upgrade in bringing on Noto to CFO. It has promoted (or given more responsibility to) Adam Bain in sales and business development as well as Katie Jacobs Stanton in media. Both have been standout stars at the company and should ably do their new expanded jobs well.
It should also help having made some recent changes in management. If nothing else, replacing some folks should help to clear the air and get people focused on key internal goals rather than focused on internal drama.
But where does Twitter go from here? How do you "fix" the company and get it moving in the right direction again? Here are my suggestions:
- Buy Kik. Twitter could have turned its direct messaging feature into a full-blown messaging application two years ago and have ridden the messaging wave. It didn't. It's too late to build now. It has to buy its way in. Facebook (FB) bought WhatsApp based on its popularity and the failure of its Facebook Messenger service to take off. Twitter needs to face up to its own failures and buy its way into the market. Kik is its best bet. It will be expensive, though. It might cost $7 billion to $10 billion, which is potentially half the company's market capitalization. But it still should. Kik is the next hottest messaging app after WhatsApp, WeChat and Line, and it's very popular among American teens.
- Twitter should look to move more strongly into adjacent areas such as music, photos, and videos. I think SoundCloud as an acquisition target made a lot of sense. It's extremely popular and promotes shares across Twitter. It's also a great media property that will only get more important over time. Can it be better monetized? It has to be. And Twitter's moves to buy MoPub and improve its "off-network" reach for ads would be strengthened with additional properties like SoundCloud. It should also look for other photo and video properties gaining traction as acquisition targets.
- Promote Vine much more. Vines continue to seep through to popular culture almost with no promotion by Twitter. That's a sign of a strong property but a little promotional help from Twitter would sure help.
- Product-wise: attract more readers. Twitter can be a baffling experience for newbies when they first sign up. There's been lots of hand-wringing about how to fix this without turning off the core Twitter tweeters who love the service just as it is and on whom Twitter depends to keep creating great content for free. There needs to be a better way for Twitter to attract people who just want to read Twitter like a newspaper. How do you sign them up, get great content for them and keep them coming back? Those are the key product questions. To date, Twitter really hasn't done a great job of doing that.
- Keep bringing in the bucks. This almost goes without saying. Adam Bain and his team have done a great job of selling more stuff on Twitter in the last few years. Obviously, that needs to continue. One of their efforts that has gone largely unnoticed in the last year is building a big mobile ad network that reaches people off the Twitter network as well as on. That's what the MoPub acquisition was all about. Twitter needs to do more to increase its programmatic ad reach. That's what Facebook is doing. Even AOL (AOL) and Yahoo! (YHOO) are going to be stepping on the gas on this much more in the months ahead.
- Keep a media stranglehold. It's been remarkable just how powerfully Twitter has been able to get major media to promote the Twitter handles of all their key stars over the last few years. Katie Jacobs Stanton is inheriting a very strong media group. Her charge is really to keep this stranglehold. Make sure any big celebrity or media person continues to rely on Twitter as their go to place to break news. Figure out how to ensure users see that "hot news" that just broke on Twitter from people they really care about. That secondary aspect really hasn't been done effectively yet.
There's going to be a lot of pressure on Dick Costolo over the next few months to show his directors that he's got Twitter back on track after the last few months of speed bumps and management changes. If he can show meaningful progress in several of these six areas, he will likely continue on as CEO.
At the time of publication the author was long YHOO.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.