A splutter at Twitter as ad revenues fall away

27.04.17

News this week that revenue at social media behemoth Twitter had fallen for the first time ever, was a true spill-your-coffee moment for most media observers.

Was it Donald Trump’s constant controversial use of the platform that was suddenly making it unfashionable? How else to explain the company reporting an 8% fall in revenue in the first quarter to $548m?

Investor jitters were quickly calmed though when, the company announced a healthy increase in the number of monthly users, to 328 million. And for perspective, we must remember that like many digital companies, historically including Amazon and Uber, Twitter has never turned a profit.

Twitter’s ad revenue for the quarter fell 11% to at $474m. But analysts had predicted it would be worse, in the region of $443m. All in all, the company made a net quarterly loss of $62m, compared to $80m in the first quarter of 2016and the even bigger $167m it lost in the previous quarter.

If you’re an 11-year-old firm currently losing almost $700,000 a day, yet shares of were soaring 10.4% on Wednesday morning, you could afford to be as cooly confident as Twitter chief exec Jack Dorsey, who, as MarketWatch put it, “would be making close to $25 million on his investment.”

“While we continue to face revenue headwinds, we believe that executing on our plan and growing our audience should result in positive revenue growth over the long term,” he was quoted as saying in Variety and elsewhere. Taking the long view is the right thing to do in a volatile world, and should ensure both Twitter and Mr Dorsey are around for a lot longer.

Is twitter really failing?

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