Is Twitter The Future Of News Broadcast?

| About: Twitter, Inc. (TWTR)

Summary

Twitter and CBS signed a partnership to air the Republic and Democratic conventions.

I believe that this is another step that Twitter is taking to become a comprehensive news platform.

Streaming and opinions via tweets can be very powerful in communication, and Twitter has all the right assets.

Twitter (NYSE:TWTR) announced that it has gone into a partnership with CBS News to live stream the network's digital coverage of the Republican and Democratic convention. This is quite significant in that it will be the first time that the social media company to live stream such event. Under the agreement, CBSN, CBS News's 24-hour digital streaming news channel, will stream on TWTR its coverage of the convention. The Republican National Convention will be held on July 18-22 while Democratic National Convention will be held from July 24-30. This will be a great opportunity for Twitter to showcase its streaming platform and social media network effect by bringing live discussion and video streams to the users.

Although much has been talked about Twitter and how the company is in a decline because it cannot compete against Facebook (NASDAQ:FB), I have presented a different view in that I believe that Twitter could have a shot in China given that it already has about 10 million users in the country and that Twitter remains a valuable channel for news and updates. With the CBS partnership, it seems that Twitter is transforming itself into a news streaming platform and I believe that it could be even more valuable when it combine streaming news and user Tweets on the news into a single package. This essentially provides both facts and opinions to the users and will be an unique platform for news events. In addition, when we look at the modern online news channels from CNN, Fox News or BBC, none of these traditional news broadcasters has a similar platform. Successful delivery of the CBS event as well as integrating tweets into the content could also increase Twitter's valuation as a take-out target when traditional news broadcasters look to expand their digital footprint.

While it may be too early for Twitter to become a national streaming platform, I am not surprised by its growth prospect and I like how Twitter has taken steps to evolve into a legitimate platform. Recall that in April, Twitter announced a partnership with the NFL to stream 10 Thursday night games that will start in the fall. There are also reports that Twitter is also looking for other deals with sports leagues that could draw viewers onto its platform.

I think Twitter's effort could pay off in the long-run because sports is widely consumed by the online viewers and that Twitter's coverage of the news event is more comprehensive than the other cable news out there. Currently there are over 300 million monthly active users but there are an additional 500 million users who visit but do not log into Twitter. These extra users will be key in driving Twitter user engagement as Twitter gradually convert them into active users.

Overall I am positive on Twitter and see the network to be doing the right things by piecing up its assets and attracting users. The potential catalyst from M&A also makes Twitter an attractive investment.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.