Short messaging/microblogging service provider
) recently announced the acquisition of an Android lock-screen
app named Cover and its development team. However, the number of
Cover employees joining Twitter and the financial terms of the
deal were not disclosed.
Cover was co-founded by Todd Jackson, Edward Ho and Gordon Luk,
all of whom happened to be ex-employees of
) and was launched on an invitation-only basis in Oct 2013. Since
its launch, app installs have been in the range of 100,000 to
500,000 on Google Play.
Putting off speculations regarding the continuity of Cover on
Google Play, the company announced that it has no intention of
discontinuing the app immediately.
Cover analyzes a user's smartphone behavior and then displays six
apps on the Android lock screen based on the current location of
the user (whether at home or at office). Thus, its basic motive
is to improve customer satisfaction by providing them the right
apps on a real time basis.
This is Twitter's first Android-specific acquisition since the
inception of the company in Apr 2007. This acquisition highlights
Twitter's mobile-first approach as more than 75.0% of Twitter's
users access the service through their respective mobile devices.
We believe that as more and more new and improved apps are vying
for the attention of users, Cover is an important app as it
improves Twitter's relevancy as a real-time platform. This will
enable Twitter to retain and expand its customer base, driving
growth and profitability, going forward.
Of late, Twitter is facing a number of issues that are troubling
its investors. The growing popularity of
) Instagram among U.S. smartphone users and monetization problems
are major headwinds.
However, we believe that Twitter's recent initiatives that
include the tagging of photos for
) iOS and Google's Android devices will increase customer
engagement going forward.
Currently, Twitter has a Zacks Rank #3 (Hold).
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