Thursday, July 27, 2017

AdWeek: Despite High Hopes, Twitter’s User Growth Fell Flat in the Second Quarter of 2017

Twitter's uneven performance continues. After rumors of it being acquired, and a change in management, it seemed as if Twitter was moving in the right direction. It introduced videos to its platform, managed to see subscriber growth, and had some positive trends in its stock price. All of that changed when it announced 2Q results.

In 2Q, even with Mr. Trump using the platform as his public communication of choice, subscribers remained flat in the U.S. This is very tough to swallow given the growth of subscribers by Facebook, Instagram, and Snapchat. It's also not reassuring that management didn't really have a good answer to the stagnant growth, and that Twitter reduced expectations for the rest of the year. This could also be a conservatism tactic, but even so, most people were expecting growth.

As the article states, there were some positive developments. Twitter stated that sub count grew in their largest 12 markets.

Unfortunately, some of the skeptics are being proven right that Twitter is a nichey product with little mass appeal like a Facebook. That said, I still think they are still valuable in the internet landscape, and in the right hands could be economically viable. I anticipate an acquisition, just a question of what price to buy shares.

No comments: