Skip to footer

After sluggish fourth quarter, how can Twitter pick up the pace?

To grow its revenue, the company will need to find a way to bring in more ad dollars, as it competes with increasingly visual platforms.

|
Mike Blake/Reuters/ File
Jack Dorsey, chief executive officer of Twitter and CEO of Square, goes for a walk on the first day of the annual Allen and Co. media conference in Sun Valley, Idaho, July 8, 2015.

In the past year, Twitter has become the preferred mode of communication for the US President. But not even the leader of the free world could boost the company’s bottom line.

“The Trump effect was zero,” analyst Michael Pachter told Reuters after Twitter issued a disappointing quarterly report Thursday morning. The company’s revenue grew just 1 percent in the fourth quarter, to $717.2 million, marking the slowest growth for the company since it went public in 2013.

Looking ahead to the first quarter, Twitter forecast earnings before taxes of $75 million to $95 million, whereas analysts had expected more than $190 million.

This slow growth contrasts with other social networks, especially Facebook and Snapchat, as Twitter struggles to attract more users. The company's future success or failure could depend on how it competes with these firms for advertising dollars.

In its letter to investors, the company warned that revenue could now “be further impacted by escalating competition for digital ad spending.”

Ad revenue forms the bulk of income for many internet firms; one former Google executive described that company to Bloomberg as “an advertising company with a bunch of hobbies.” $638 million of Twitter’s Q4 revenue came from online ads.

But that number marked a slight decline from previous quarters, making analysts wonder how the company can bring advertisers back.

"I don't think they can grow revenue without showing user growth," Mr. Pachter told Reuters. "They have to convince advertisers that they will reach an expanding audience, or they will have trouble competing for new revenue dollars."

But Twitter’s familiar, 140-character format may not be what internet users want in 2017.

"It's still a social platform founded in text," Chris Innes, the chief monetization officer of the advertising software company SteelHouse, told AdWeek on Thursday.

But social media members are increasingly sharing and viewing videos, a trend that some of Twitter’s competitors have already capitalized on. Communicating in pictures or short videos "is even more information dense, and even more economical," Forbes contributor Adam Hartung wrote last May.

"While you may not imagine using pictures to replace language, the fact is it is happening with increasing frequency, and lots of people are making the switch. Thus it is a trend that will affect how we do many things for many years into the future," he wrote, highlighting Snapchat's success getting ahead of the trend.

It's a trend Twitter could go after, in hopes of bringing in more ad dollars. 

"Despite disappointing numbers, many think Twitter's reign is far from over, and plans to introduce live video with highly-sought-after advertising blocks have piqued the interest of big name brands like Ford and the NFL," The Christian Science Monitor reported in September. The company has continued to integrate Periscope, its live-streaming app, as well.

The company could go further down this road in coming months. Its report also hinted at a “re-evaluation of its revenue product feature portfolio, which could result in the de-emphasis of certain product features.”

It will be up to advertisers – and users – to decide whether this “de-emphasis” is an improvement.

This report contains material from Reuters and the Associated Press.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to After sluggish fourth quarter, how can Twitter pick up the pace?
Read this article in
https://www.csmonitor.com/Business/2017/0209/After-sluggish-fourth-quarter-how-can-Twitter-pick-up-the-pace
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe