Here’s Why Twitter Is Increasing Its Focus On Machine Learning
Recently, Twitter (NYSE:TWTR) announced that it is acquiring Magic Pony Technology, a London based technology company that has developed machine learning techniques for visual processing. The deal was disclosed by CEO Jack Dorsey in a blog post with no reference to its size. This investment builds on other acquisitions made by the company in this space such as Madbits in 2014 and Whetlab in 2015. Twitter plans to use Magic Pony’s technology (which can understand the features of imagery) to enhance its video strength. This technology will allow the company to automatically sharpen videos and images on its platform and gain the ability to extrapolate meaningfully from one small texture to a much larger one. Machine intelligence is gaining importance as companies such as Facebook and Google are also investing heavily in this space to enhance user experience. Videos and live streaming would be critical for social media platforms in future and we believe Twitter’s strategy to invest towards improving user experience in images and videos should work to its advantage.
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Better Quality Of Live Streaming Can Improve User Engagement On Twitter
According to Rob Bishop, the CEO of Magic Pony, the company’s technology can dramatically improve both low-quality streaming video and material shot in low light on poor smartphone cameras alike, by teaching its neural network how components of images—such as edges, textures, and straight lines—generally work. This allows it to restore resolution to low-res pics and video, or even create convincing new ones. As Twitter struggles to grow its users and improve user engagement, live streaming of sports events and clips relating to important news events can help the company to meet this goal. (Read Can Twitter’s Sports Strategy Provide Its Revenues The Much Needed Boost ?). We expect Twitter’s number of timeline views per U.S. monthly active user to increase gradually from 225,000 in 2016 to 239,000 by the end of our forecast period.
Twitter has mentioned that the user engagement significantly increases during certain live events, shows and breaking news. We believe better quality of live streaming will be an important driver to improve this engagement which Twitter can achieve with Magic Pony’s technology.
Advertisers are now increasing the focus on live streaming and digital video advertising. According to a January 2016 research report by eMarketer, nearly 80% of U.S. retail executives stated that producing live streaming video events helps them create more authentic interaction with audiences. A survey from Cowen and Company published in Q1 2016 estimates that U.S. digital video ad spending will reach $28.1 billion in 2020, up from $9.9 billion in 2016.
As competitors such as Facebook (Facebook Live) and Google (YouTube connect) focus on live streaming and artificial intelligence, it is important for Twitter to improve its streaming quality to stay competitive. Magic Pony might provide this edge to Twitter.
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