Twitter loses ad revenue despite gaining 2 million users and Trump 'boost'
Summary: Shares in Twitter have slumped after the tech company suffered a decline in advertising income, despite a rise in user numbers as Donald Trump’s high-profile tweeting helped to advertise the platform’s influence. Jack Dorsey, chief executive and co-founder, hailed the growing “impact and influence” of Twitter, saying the US president had “boosted the power” of the service. But investors took fright as the loss-making company conceded that its financial growth was lagging behind its increasing popularity among users and would continue to do so in the near future. Twitter has now racked up losses of almost $2.8bn since it floated on the stock market three years ago – at $26 a share – and the latest figures deal a blow to the company’s plan to turn a profit by the end of 2017. The company had reported an increase in advertising revenue in the first three quarters of the year, before the trend reversed in the final three months. This was 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. The company said “revenue growth will continue to lag audience growth in 2017 and could now be further impacted by escalating competition for digital ad spending”.
[] Investors take fright as company reveals $457m loss for 2016 and concedes its financial growth is lagging its popularity
[] 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.
[] fall in advertising revenue in the fourth quarter, down to $638m from $641m in the same period of last year.
[] The number of monthly users had picked up slightly since then, rising 3% in 2016 compared with 1% in 2015, and Dorsey said he believed advertising revenue would catch up.
[[] But there were signs of improvement ahead as cash flow increased to $440m from $5m in 2015
[] company is also making progress in the amount it spends on paying staff in stock, which has fallen to 24% of revenue and is slated to fall to 20% in 2017.
In my opinion I think that advertising is already so hard to make a revenue out of since as some audience do block of the ads making it harder for advertisements company to make revenue out it. From the statistics above, the fall in advertising revenue is still decreasing, but having such a large audience on a big social media platform could still allow Twitter to get some revenues out of it, if users do spend a lot of time on it and more users are joining.
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