Twitter shares suffered a plunge on Thursday, sinking more than 12 percent, closing at $16.41 and causing the company a net loss in the fourth quarter of $167 million. Revenue in the quarter rose only by a modest one percent, barely reaching $717 million.
The popular social media giant has been having a series of troubles recently, struggling to increase profit, attract new users and stay on top of the game. In 2016 Twitter had 319 million users, a growth of 4% compared to 2015. Revenue from advertising, which makes up the majority of income, dropped slightly to $638 million. All in all, Twitter lost $456 million on revenues of $2.5 billion.
Company CEO Jack Dorsey maintains an optimistic attitude, hoping that expanding and upgrading the network to add videos and other features, will help it catch up and become competitive again. “The whole world is watching Twitter. While we may not be meeting everyone’s growth expectations, there’s one thing that continues to grow and outpace our peers: Twitter’s influence and impact.”
He pointed out that this particular network has its place in the modern world, being the most popular platform that celebrities and politicians use to give statements, comments and opinions on various topics. However, some analysts think that Twitter is slowing down and failing to stay ahead of its competition, which is getting bigger and more aggressive every day.
Jan Dawson, a researcher at Jackdaw notes that there’s no doubt that the company has been trying to attract more users, but is doing it too slow to stay competitive. “Twitter’s big competitors for direct response advertising — notably Facebook and Google — are just way better at this stuff than they are, and Twitter simply hasn’t made anywhere near enough progress here over the last few years. As a result, it is enormously susceptible to competitive threats.”
And while Trump’s election and fondness of Twitter did help it attract more users and become more popular than ever, it’s not enough to keep it going forever. It needs more users and more coverage fast. A userbase of 319 million is quite impressive, but it’s much lower than Facebook’s 1.86 billion.
David Giannetto, a prominent social media analyst, underlines that “Twitter is really buzzing because of Trump, but this is not a solution to a problem that’s been dragging on for too long”. Gianetto describes Twitter as a social media network that is more demanding to its users than its competitors, like Facebook. “It’s not a platform that creates great engagement among passive users,” Giannetto said. “That’s a weakness of the technology. It only works with somebody who is really interested in scrolling through a long feed. You have to enjoy that. And most people just don’t.”
Twitter has, however, made efforts to resolve this issue and listen to its users complaints. It received a major upgrade last year – a “Moments” tab, which serves as a newsreel of popular tweets that are organized by category. There’s also another new feature, called “In case you missed it”, that enables users to see older tweets that they might have missed.
And although these changes indicate that the company maintains a practice of self-improvement and listens to its customers, it’s pretty clear that minor changes like this can’t resolve a series of problems that plague the network for years now. If Twitter intends to stay popular and hold its place in the social media pool that gets more crowded every year, its leadership has to come up with a new plan and implement radical changes.