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Leadership / Strategy

Twitter Tumbles Even as Ad Revenue Soars

The equivalent to over £3 billion has been wiped off Twitter’s market value after investors deemed the loss of a million users too big a risk.

Some reward for a third consecutive quarterly profit and a sharp rise in advertising revenue.

As the New York Stock market opened Twitter’s stock was down by 15 percent and at the time of writing it continues to drop.

The number of active users on the platform have dropped from 336 to 335 million in the last three months.

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Twitter have been leading a very public expulsion of fake and malicious accounts on their platform.

Facebook it, the Tweets are Out as Social Media Losses Shine and Money.Jack Dorsey, Twitter’s CEO commented on the release of the companies second quarter results that: “Our second quarter results reflect the work we’re doing to ensure more people get value from Twitter every day.”

“We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviours that distort and distract from the public conversation,” he added.

Twitters Q2 results show that its revenue totalled £542 million a 24 percent year-on-year increase. Advertising revenue meanwhil increased by 23 percent to £458 million.

Twitter not the only social media platform to feel the sting of the market this week.

During the investor conference call it was noted that the first and second quarter of this year is getting an advertising revenue benefit from this summer’s World Cup.

In the same call CEO Jack Dorsey tried to calm fears of investors that its recent actions will have consequence for the bottom-line going forward.

He told them that: “We do see health as a growth vector,” and that removing the negative elements on the site will have positive returns in the future.

One investor asked if they would see an end timeline for the new measures been implemented on the platform and Mr Dorsey responded: “It doesn’t have an end point you constantly have to evolve as you learn the dynamics of the network.”

Facebook it, the Tweets are Out as Social Media Losses Shine and Money.

System Shock for Social Media Giants

Twitter’s woes comes one day after Facebook surfed the single biggest loss in one day in the market’s history, when it had £91.50 billion wiped off its share value.

Facebooks Q2 release saw CEO Mark Zuckerberg admit that: “GDPR was an important moment for our industry. We did see a decline in monthly actives in Europe, down by about 1 million people as a result.”

The market reacted to a deceleration in the growth of users in key geolocations such as the US and Europe.

The company has 2.23 billion active monthly users; an increase of 11 percent year-on-year. The company is seeing user growth in the Asia-Pacific market, but user growth in North America has stalled.

The decline in Europe and stagnation in North America has worried investors as these are the most lucrative advertising markets for the company.

In North America it earns $25.91 per user and $8.76 per user in Europe.

However, in Asia-Pacific it only earns $2.62 per user, while this market may grow in value, it is not high enough to counter a drop in users in America or a further drop in Europe.
This article is from the CBROnline archive: some formatting and images may not be present.

CBR Staff Writer

CBR Online legacy content.