Social media has taken up many people’s lives over the past few years. Twitter is certainly one of the most important platforms, however lately it is not doing as well as expected. In fact, Twitter is in reality struggling to add more users.
Regardless of the fact that the company has announced revenues to be higher than expected – with $502m instead of the forecasted $470-$482m, the company is experiencing the slowest user growth ever. In contrast to the 1.4bn monthly users on Facebook, Twitter only has some 316m.
Last month Twitter’s former CEO Dick Costolo resigned, and Mr. Jack Dorsey, the site’s co-founder, is temporarily in charge until a new permanent CEO is chosen. According to Mr. Dorsey, the second quarter revenue was satisfactory, but they are frustrated with the slow growth in the audience. One of the main reasons why former CEO Mr. Costolo stepped down was in fact the shareholders’ concerns because of this poor user growth.
Twitter is also working hard on advertising revenue at the moment too. In its attempt to generate more advertising revenue, the company is focusing on trying to have used click on links or download an app.
The company is fully aware that it is lagging behind other tech rivals, including Whatsapp, Instagram and Snapchat. The latter has some 200 million users, which is quite high considering that it was initially released in 2011. Instagram, which was initially released in 2010, has 300 million users, while Whatsapp has experienced significant growth since 2009, and currently has some 700 million users. It is worth noting that Twitter has been founded since 2006, and so when putting this into perspective, it has indeed unsatisfactory results when compared to these other apps which have been available much later than that.
Another quite shocking piece of news is that Twitter has accounted for less than 1% of the $145bn digital advertising market in 2014. Facebook, on the other hand, had a share of nearly 8%, whereas Google’s share stood at more than 31%.
Facebook made a profit of £341m over the first quarter this year, while Twitter made a loss of £105m.
Overall, Twitter is making a loss. When analysing these figures, and taking into account that the closing share price seems to be falling each time, the company certainly needs to come up with a solution. The latest share price fell by nearly 4% in 1 year. This, coupled up with its slow user growth, are quite alarming for a company of its size. Let us hope that feasible solutions are put into practice so that this company, which once was one of the online giants, does not keep losing out and falling behind!
