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Twin blow to Twitter

July 27, 2017

The social media platform reported weaker-than-expected growth in monthly active users and saw a drop in revenues, dealing the company the twin blow of another loss and further doubt about Twitter's business.

Twitter Logo Symbolbild
Image: Reuters/D. Ruvic

The message platform, which has been struggling to keep pace in the fast-moving world of social media, has logged a net loss of $116 million (99.1 million euros) in the second quarter.

More importantly, Twitter reported its base of monthly active users was unchanged compared to the first three months of the year and up just five percent from a year earlier.

As a result, advertising revenue fell eight percent to $489 million in the quarter, dragging down overall revenues to $574 million from a year ago - down 5 percent.

Twitter, which has never delivered a profit, said it is making progress on improving its product, in the expectation this will boost growth and help it move to profitability.

"We're proud that the product improvements we're making continue to increase their overall contribution to Twitter's growth," Twitter chief executive Jack Dorsey said in a statement,

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User growth stalls

Amid fierce competition from Facebook and messaging app Snapchat, the San Francisco-based group has been seeking to draw in users by offering more video including live streaming of sporting events, aiming to broaden its appeal. But it suffered a setback in April when it lost a deal to livestream NFL games this year to Amazon.

Twitter's average monthly active users (MAU) was 328 million in the three months through June 30. A disappointment compared with the first three months of the year when it added 9 million more monthly active users than expected.

Monthly active users, a key performance indicator for social networking services, is typically calculated by tabulating the number of users who have logged in and logged out during the 30-day period.

Dorsey said Twitter was focusing on the metric of "daily active users" rather than the more closely watched monthly figure, adding that daily usage was up 12 percent, without offering a specific number.

"We're strengthening our execution, which gives us confidence that our product improvements will continue to contribute to meaningful increases in daily active usage," he said.

On Thursday, Twitter shares were down 9.84 percent in early trading on Wall Street.

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uhe/kd (Reuters, AFP, dpa)

 

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