Yeah you read the title right, Twitter didn’t grow at all during the last quarter. In typical Twitter fashion, shares began to slide before the earnings call and then completely tanked when it became clear just how bad things were over the last quarter.
We are used to seeing Twitter stock tank around the earnings call by now but after an impressive Q1 this year, today will be a hit for the company. Stock was down more than 12% in trading yesterday wiping out most of the gains it made in the first quarter.
The Trump bump was a one time deal
Last quarter Twitter went slightly up in user growth which was a surprise to many of us, it is being referred to now as the “Trump Bump.” It is also the reason why Twitter won’t ban Trump despite calls to do so, Trump is good business and people want to see what he thinks through his tweets. His feed is an insight into what the man in the most powerful seat in America is thinking in real time and if Twitter were to ban him they could face losing numbers because lets face it, there are people who have joined the service to see just what is happening with Donald Trump in real time.
Who cares about growth?
Some might wonder, why does growth matter? Why can’t we just be content with where they are now? Why do they need to grow anymore? Its simple really – they trade on Wall Street. Investors primarily measure success and failure through revenue and user growth, Twitter is struggling on both fronts.
They face a bizarre situation right now, Twitter has already told investors that 2017 is a lost year. They are still struggling to get advertisers on board at scale, ads are more expensive than Facebook and the ad model on Twitter is just poor in comparison. Now ad revenue has started to fall over the last quarter and is down nearly 5% from this time last year.
A conflicted image
The image is a large part of the problem, Twitter has a conflicting perception that it is full of neo-Nazi trolls as well as being a great place for journalists to hang out and break news. The reality now is that tweets are so available on TV, news sites and Facebook that people don’t need to be afraid of missing out. You don’t need to follow Trump’s feed to know what is happening because the media covers it so extensively on their websites.
Reddit is another site with similar problems with their image, a source of news for media outlets but there are big problems with harassment and a complicated design which pushes users away.
It is far from sunshine and puppy dogs
Some in the Twittersphere like to believe all is peachy here but if you cared about the platform you wouldn’t take that point of view. They are swimming against the current, they have been for a long time now and it doesn’t appear to be changing any time soon, if it ever does change at all.
Twitter has been trying to convince users to come back and try again or get new users on board who have never tried the platform before. Over the period of the last year Twitter grew by 15 million people, in the same timeframe Facebook grew by 294 million users.
When you dive into their numbers for the last quarter things get even worse, While there has been zero user growth over the last quarter, user numbers grew internationally but were completely offset by US user loses.
More than a million Americans quit Twitter completely in the last three months.
With no growth over the past 3 months at all, the reality is that there is probably negative growth if you dumped all the automated bot accounts from the platform. Lets face it, there are bot accounts running crazy around the platform now, I’m getting tagged in notifications from them every week without fail.
People are not happy, we want Twitter to get it together, we don’t want them to fail.
Your absolute, objective incompetence confuses and infuriates me with the power of a thousand suns.
Get your shit together.
— dustin curtis (@dcurtis) July 27, 2017
Twitter….no user growth (probably negative if you include bots). Declining revenue YOY and never made a profit. Not a great story
— Niall Harbison (@NiallHarbison) July 27, 2017
and the people who do use twitter
we wonder why the fuck we're here https://t.co/G8LAADQgDj
— Stefan Constantine (@WhatTheBit) July 27, 2017
For me, with growth being such a struggle for such a long time on Twitter I am inclined to think that they are at the ceiling and I would love for them to prove me wrong. However I feel that the people who want to be on Twitter are already here, if any of these product initiatives such has live video were having any success at all we would see it in the data, even if only marginally.
Business as usual
Really for the most part it was business as usual yesterday for Twitter’s earnings call. It started with optimism which was soon wiped out, stock tanked, Twitter gave a weak report and the media tore Twitter to shreds. The only thing different this time was I saw a number of influencers jumping on board and telling Twitter to get their shit together too. It was a particularly brutal quarter and stock closed yesterday at 14% down.
I spent a lot of yesterday researching opinions on Twitter and from what I can see, Twitter power users are split. There are power users who are delighted, believe nothing is wrong and are happy with Twitter in its current form. Then there are power users who can see the problems, want things to change and want Twitter to get their shit together but realise that there is a good chance they could end up leaving the platform like the million plus US users in the last quarter unless changes are made.
We wait to see what Twitter will do next but at the moment things are really not looking good for the social media platform.