Twitter Shares Drop 10%
Twitter’s social media innovation may not be translating to massive profits, as a recent earnings call revealed that user growth for the platform has become “sluggish.” The company plays host to one of the largest user bases in history and often plays a central role in events such as hacks. Despite its massive size, Twitter has had difficulty monetizing its traffic. One of its strengths is in its users creating viral content that drives spikes in traffic, but earlier this year it became evident that Twitter adoption had begun to stagnate.
Less viral content will mean less advertising revenue for the social media giant. The company may be forced to consider new strategies in the coming years, such as changes to its platform or to the way it delivers advertising.
For their part, Twitter executives seem to understand that a turnaround could take a significant amount of time. They don’t presently see themselves as having reached the mainstream and as such do not expect sustained growth. Following these remarks, the price of Twitter stock began to tumble, dropping a total of 10%.
There is some good news for Twitter, however. The company has managed to increase revenue per user by displaying more advertisements. Combined with a new push to increase the user base, and the company could return attractive profits in later quarters. For now, Twitter has managed to remain solvent in the face of stark predictions and steep competition. Rival network Facebook now has approximately 1.5 billion users while Twitter has around 300 million.
Featured image from Anthony Correia / Shutterstock.