The Main Problem With Twitter And What It Needs To Do To Solve It

Shares of Twitter Inc TWTR have fallen from a cliff, down almost 20 percent, since the company reported its second-quarter earnings on July 28. Michael Yoshikami from Destination Wealth Management, was on CNBC Tuesday to discuss what is the main problem the company is facing right now and what it needs to do to solve it.

The Problem

"The problem is not as many people are using it as it might appear," Yoshikami said. "Twitter has great name recognition, but in terms of its ability to really become a meaningful part of people's lives beyond say journalist and politicians and celebrities. I think, Twitter is really a company that's looking for a purpose at this point and they said as much during the conference call that they are really having a crisis in really identifying what they are and who they are and how they are really going to be useful in people's lives."

He continued, "And so, they are in what's called, in scary terms in the technology world in a turnaround mode at this point. Even though revenue was fairly strong in this last earnings report, I think, Twitter is really facing a decision of defining who they are, that's not only a marketing issue, but it's also a usability issue."

The Solution: An Easy To Use Product

On whether Twitter needs to make its product more user friendly, Yoshikami said, "Yes, obviously you need to make it an easier product to use and you need to make it again a more meaningful product. It needs to be something that isn't so much finding out what Kim Kardashian had for lunch. I mean, you need to find out exactly what you are trying to do in terms of a company."