When Jack Dorsey returned last year as chief executive of Twitter, he faced a really rocky start. The stock is down about 47% since Dorsey officially took the position four months ago.
Source : The New York Times
Mr. Dorsey has laid off employees and deep-sixed an expansion of the company’s headquarters in San Francisco. He has appointed new executives and shaken up the company’s board. And when it comes to making changes to Twitter’s core product, nothing is sacred.
But change is not coming fast enough.
On Wednesday, after many quarters of slowing user growth, Twitter said its monthly visitors in the fourth quarter totaled 320 million — exactly the same as the company reported in the previous quarter. While the number was up 9 percent from a year ago, when monthly active users stood at 288 million, the figures showed that Mr. Dorsey’s recent moves have made little impact in attracting users.
Excluding Twitter’s followers who use a text-only version of the service, the company reported monthly users of 305 million at the end of the fourth quarter, down from 307 million in the previous quarter. Twitter heavily emphasized that the numbers were now on the rise; monthly visitors as of the end of January returned to the same levels as in late September.
The problem, Twitter said, is that in many ways its service is still not intuitive to use, and it comes with quirks that newcomers find difficult to grasp.
“We think there’s a lot of opportunity to fix the broken windows and confusing aspects of our product,” Mr. Dorsey said in a conference call with investors on Wednesday. He also emphasized the real-time nature of the service as the feature the company is most focused on building upon. “Twitter is live: live commentary, live conversations, live connections,” he said.
The results were released at a tricky time for the nine-year-old company, which has struggled to convince investors that it can live up to its goal of being able to reach every person on the planet. As user growth has decelerated, the pressure for Twitter to show that it can appeal to the public at large has been intensified by the specter of Facebook, which, with 1.59 billion users, is five times the size of Twitter.
“The whole idea of Twitter’s user problem has dragged on way longer than anyone wanted it to, let alone Twitter,” said Debra Aho Williamson, an Internet analyst at eMarketer, an industry research firm. “In the face of continuing pressure to add users and not a lot of movement, can they shift the attention somewhere else?”
Shares of Twitter have been pummeled in the last year, dropping around 67 percent. The stock declined in after-hours trading on Wednesday.
The user figures overshadowed otherwise positive fourth-quarter earnings results. Twitter reported revenue of $710 million, up 48 percent from $479 million a year ago. Net loss narrowed to $90.2 million, or 13 cents a share, from a loss of $125 million, or 20 cents a share, in the same quarter last year.
The numbers were better than analysts’ estimates of roughly $709 million in revenue and a loss of 17 cents a share.
But Twitter’s outlook was lower than projected by Wall Street. The company estimated revenue of $595 million to $610 million in the current quarter, compared with Wall Street expectations of $628 million.
Excluding common business expenses like stock compensation, taxes and depreciation — a measure called adjusted Ebitda that the company prefers to highlight — Twitter reported a profit of $191 million compared with $141 million a year ago.
In recent weeks, Twitter has taken steps to show it is willing to make sweeping changes to its product. On Wednesday morning, just hours before the earnings announcement, Twitter said it would start showing a selection of posts to users who have been away from the service for a while based on the types of posts they like and conversations they have on the service.
Mr. Dorsey said some of the company’s recent moves to attract users were paying off, pointing to Moments, a human-curated approach to highlighting activity on Twitter that was introduced last year. Mr. Dorsey said early efforts with Moments were promising, though the company had work to do to refine the experience.
Beyond Twitter’s core product, the company’s leaders suggested that room for revenue growth may lie outside of the monthly active users that are the focus of investors.
Adam Bain, Twitter’s chief operating officer, pointed to early success in showing ads to Twitter users who are not logged into the service. The company has also emphasized its “total audience” — that is, the people who see Twitter posts on sites across the Internet, yet do not regularly visit Twitter’s website.
Mr. Dorsey also underscored the importance of Periscope, the company’s live video app acquired last year, as an important component of its strategy. On Wednesday, Twitter announced it had promoted Kayvon Beykpour, founder of Periscope, to its executive team.
All the work to attract new users is not cheap. Twitter’s expenses soared in the fourth quarter to $591 million, up 52 percent from a year earlier.
“Can they build out an ad business for people who see tweets in the wild?” Ms. Williamson, the Internet analyst, said. “Can they use their data to create a strong ad network and deliver relevant advertising outside of Twitter?”
“All of that is still in the works,” she said.
Source : The New York Times
Comments
Post a Comment