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> A long-term turnaround depends on Twitter expanding its audience. That number stands at 328 million monthly active users -- the same as in the prior quarter,

by cwyers 9y ago

> A long-term turnaround depends on Twitter expanding its audience. That number stands at 328 million monthly active users -- the same as in the prior quarter, the San Francisco-based company said in a statement Thursday. Revenue fell 4.7 percent and the company’s net loss also widened, affected by a $55 million writedown of the value of its investment in SoundCloud, the German music streaming service. This is insanity. This is utter insanity. Twitter is at over 300 million monthly users. How have we created a system where that's not enough? Twitter is incredibly relevant. The president's Tweets are basically driving the news cycle now. And yet it needs to grow? Why? (Okay, okay, I understand why -- to feed all the VCs that invested in it. I just... ugh.)

kosievdmerwe 9y ago
Because at the end of the day companies are supposed to make a profit and Twitter isn't managing that. They also aren't managing growth, which people believe is a good reason to delay profitability in favor of a future larger amount of profit. This is hardly ridiculous. EDIT: and moreover this is a situation that has existed for multiple quarters now, adding to the reasonableness of the frustration and lack of trust in the future of Twitter.
- cwyers 9y ago
  Could Twitter be profitable if they weren't spending so much money on new customer acquisition?
  - kosievdmerwe 9y ago
    I honestly don't know. I heard mutterings that they can become profitable if they become more lean (layoffs and less office extravagance).
shostack 9y ago
As an important comparison, Facebook just posted 2B monthly actives in Q2. From an advertising industry standpoint, the space has quickly become consolidated such that Google and FB own the vast majority of ad inventory in the market. Advertisers, particularly large advertisers who contribute a substantial portion of this revenue. As a buyer, I can state from a position of experience that managing an ad buy at scale is just as important as potential performance. If I'm an agency for example, and I can reach massively more people on FB than Twitter, I'm likely going to focus my efforts there even if ROI may suffer from diminishing returns to some extent. A big part of the reason for that is it would take significantly more hours to setup, manage and report on Twitter (or any other ad platform) separately than it would to just focus on FB in that case. So from a business level, the overhead of managing multiple ad platforms can often be a critical deciding factor in addition to just the actual ad performance. Time is money, and lots of people hours cost lots of money, particularly those people who have the technical specialization to effectively manage digital media campaigns at scale. All of that is to explain why total ad spend is increasingly consolidating around FB and Google. And that is REALLY bad news for Twitter from an investor standpoint because it puts a big cap on their growth potential.

by cwyers 9y ago

kosievdmerwe 9y ago

Because at the end of the day companies are supposed to make a profit and Twitter isn't managing that. They also aren't managing growth, which people believe is a good reason to delay profitability in favor of a future larger amount of profit. This is hardly ridiculous. EDIT: and moreover this is a situation that has existed for multiple quarters now, adding to the reasonableness of the frustration and lack of trust in the future of Twitter.

cwyers 9y ago
Could Twitter be profitable if they weren't spending so much money on new customer acquisition?
- kosievdmerwe 9y ago
  I honestly don't know. I heard mutterings that they can become profitable if they become more lean (layoffs and less office extravagance).

shostack 9y ago

As an important comparison, Facebook just posted 2B monthly actives in Q2. From an advertising industry standpoint, the space has quickly become consolidated such that Google and FB own the vast majority of ad inventory in the market. Advertisers, particularly large advertisers who contribute a substantial portion of this revenue. As a buyer, I can state from a position of experience that managing an ad buy at scale is just as important as potential performance. If I'm an agency for example, and I can reach massively more people on FB than Twitter, I'm likely going to focus my efforts there even if ROI may suffer from diminishing returns to some extent. A big part of the reason for that is it would take significantly more hours to setup, manage and report on Twitter (or any other ad platform) separately than it would to just focus on FB in that case. So from a business level, the overhead of managing multiple ad platforms can often be a critical deciding factor in addition to just the actual ad performance. Time is money, and lots of people hours cost lots of money, particularly those people who have the technical specialization to effectively manage digital media campaigns at scale. All of that is to explain why total ad spend is increasingly consolidating around FB and Google. And that is REALLY bad news for Twitter from an investor standpoint because it puts a big cap on their growth potential.