On Tuesday, Twitter posted its second-quarter earnings report. The results show a decrease in the number of total active users, with 328 million monthly active users. The number did not change compared to the previous quarter. Moreover, the company’s shares dropped 13% as well as the advertising revenue with 8%. Meanwhile, Facebook reported 70 million new users.
Prospects Do Not Look Good For Twitter
The EPS results show an increase from 5 cents expected to 12 cents and an increased revenue of $574 million. However, from the expected 329 million active users, Twitter reported only 328 million. This comes as a concern for investors, especially since the site reported 9 million new users at the beginning of the first quarter. Compared to Facebook’s over 2 billion users, this is seen as a significant lag.
Twitter executives are aware that their user growth needs to coincide with the revenue growth. Efforts have been made to attract new users. The launching on Twitter Lite on April 6th is one of the examples. The Lite version occupies only one megabyte of storage and users can access it via a mobile web browser.
Jack Dorser, the CEO of Twitter, stated that the app is meant to attract users in remote parts of the worlds with low data access. Asked if the earnings following the launch of the app have improved, Dorsey did not provide any statistics but said the results are positive.
Improvements on Abusive Accounts
Meanwhile, Twitter has been working hard to take action against abusive accounts. The results show that abusive users generated nearly 25% of abuse reports. Due to the continuous online abuse and number of troll accounts, investors and advertisers steered away from the platform. This seems to have greatly affected the ad sales on the site.
Progress is visible. But it doesn’t help that online advertisers look at companies such as Alphabet and Facebook to generate revenue. Twitter’s salvation mainly comes from the mobile market, with eMarketer predicting that the site’s ad revenue will grow 1,6%. On the global market, however, the prediction is that it will shrink to 1,5%.
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