Sunday 19 February 2017

13/02/17 - Twitter loses ad revenue despite gaining 2 million users and Trump 'boost' (45)





The frequent use of Twitter by Donald Trump is something that has assisted the social network in increasing its user numbers. This though, wasn't significant enough of a thing to prevent the decline of advertising revenue occurring for the platform and subsequently their shares. While monthly active users have been on the climb, even with a 9% reduction in the workforce, the actual financial growth of the social network is lagging to a degree where it's being said it'll continue in the future. The gains in advertising revenue in international markets for them, was essentially 'wiped out' with the losses within the US market which was previously seeing increases within the first three quarters of 2016. One of the reasons for this decrease according to chief executive and co-founder of Twitter, Jack Dorsey, was more competition in terms of digital ad spending. To help combat against losses of this sort, he claims the company will 'scrap  less lucrative initiatives' and draw the company's focus more towards products with a higher possibility of success e.g. live video-streaming.

  • The San Francisco-based company reported annual revenues up 14% on last year to $2.5bn (£2bn)
  • Monthly active users climbed from 317 million to 319 million in the final quarter of last year
  • The tech company is still making sizeable losses, falling $457m into the red during 2016 despite cutting 9% of its workforce
  • Its shares fell by more than 11% to $16.54
  • Twitter has now racked up losses of almost $2.8bn since it floated on the stock market three years ago
  • Fall in advertising revenue in the fourth quarter in 2016, down to $638m from $641m in the same period of last year largely down to a 5% slump in revenues in the US to $440m, a fall that wiped out a 12% rise to $277m in its international markets

It'll be quite interesting seeing how Twitter fare in 2017 in terms of ad revenue. How capable they are in competing for digital ad spending against other companies/platforms like Facebook and Snapchat will have to be seen. Not only this, but the new products they end up making in the drive towards profitability will likely be quite noteworthy, with live video streaming probably being just the beginning of many ventures they could delve into.

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