Since going public last fall, Twitter has yet to announce an actual profit. And as the company got ready to announce quarterly earnings this fall, analysts expected the company to announce another modest loss.
Twitter has introduced some new features in recent months—including a “buy” button for certain brands—but nothing especially dramatic. How much time does the company have before it gets lumped in with companies that never quite took over the world, like MySpace?
Twitter makes some money by selling ads. Just not a profit. Analysts say ads aren’t a great fit with what users want from Twitter.
But analysts also say that Twitter is so useful to so many people, that profits must surely be there, somewhere.
“I always like to say that the day television was invented was not the day the 30-minute sitcom was invented, or the one-minute advertising spot,” says Rebecca Lieb from The Altimeter Group.
However, some of the analogies suggest that Twitter’s success is not a sure thing.
For instance, Rob Enderle invokes the old joke about the kid who smiled like crazy while he shoveled through a pile of horse manure. “I honestly think there’s a pony in that pile,” he says, “but it’s harder to discover because Twitter’s just so very different than everybody else is.”
He thinks Twitter’s got maybe 12 to 18 months to find the pony. Which, again, he thinks is in there somewhere. “Somebody eventually will come up with something that works” he says. “And if it isn’t Twitter, then Twitter will likely be replaced by that company.”
Like how Google replaced Yahoo, and Facebook replaced MySpace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.