How in the world is Twitter still not making any money?
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How in the world is Twitter still not making any money?
Now — as Twitter prepares for another quarterly earnings call and closes in on four years as a public company — the question looks just slightly different: How the @### is Twitter still not making money?
How does twitter offer such amazing material and is still not making money? https://t.co/udY4FSoYbx
— Brenden Kollar (@b_koll11) January 7, 2017
Despite having millions of active users around the world — and being one of President Donald Trump’s favorite platforms — Twitter has yet to make a profit.
Let’s do the numbers on why Twitter is struggling to bring in the cash:
The one time Trump bump
The president has two Twitter accounts. One is the official President of the United States account (@POTUS) and the other is his personal account (@realDonaldTrump). At more than 41 million, the president’s personal account has twice as many followers as his official account. His personal account is also the one from which Trump tweets more often.
Yet even the possibility of watching President Trump declare nuclear war in real time on Twitter does not seem enough of an incentive for people to sign up in droves — at least, not in the long term.
Military solutions are now fully in place,locked and loaded,should North Korea act unwisely. Hopefully Kim Jong Un will find another path!
— Donald J. Trump (@realDonaldTrump) August 11, 2017
The company’s first quarter results surprised Wall Street when Twitter reported that it had added 9 million active users worldwide, including 3 million in the U.S. That brought up the number of worldwide Twitter users to 328 million. Many — including those inside Twitter — attributed this to the Trump bump.
“There also is some evidence that we’ve benefitted from our new and resurrected users following more news and political accounts in Q1, particularly in the U.S.,” Anthony Noto, Twitter’s COO, said during April’s earnings call. “We believe Twitter is the best at showing you what’s happening in the world and what’s being talked about. Having political leaders of the world as well as news agencies participating and driving that is an important element to reinforcing what we’re the best at.”
However, the Trump bump was only temporary. The next quarter, Twitter actually lost 2 million U.S. users — going from 70 million U.S. users down to 68 million.
“The Trump effect lasted for exactly three months,” Michael Pachter, an analyst who covers Twitter for Wedbush, said at the time.
Could it be that following the president on Twitter is exhausting? Analysis by Business Insider found that during the first six months in office, Trump tweeted 920 times. That’s equivalent to more than five tweets a day. His twitter feed is most active between 5 a.m. to 9 a.m. Eastern Standard Time, meaning that many Americans are waking up to his tweets.
Trolls and abuse
It’s not just Trump-fatigue that might be driving U.S. users off of Twitter. The social media company has long struggled with trolls and harassment, which has led many users to abandon the platform.
“Twitter has this real conflicted image that it’s full of neo-Nazi trolls and it’s also a great place for breaking news,” Pachter told CNN. “For every Trump tweet, there’s an Ed Sheeran.”
Just weeks before Twitter announced its second quarter earnings, the singer-songwriter said he was leaving Twitter after being on the receiving end of abusive comments from trolls.
Celebrities like Sheeran are not the only ones receiving abuse. Women have long complained about abusive and violent comments they’ve been receiving. Trolls have also attacked other users based on their gender, race and religion. Twitter has promised repeatedly to take action against the trolls, but users insist the company has not done enough.
Trolling and harassment have a negative impact on engagement on Twitter. If Twitter could make its platform less toxic for its users, brands who want to interact with their customers online would also benefit, Robert Lang, CEO of Socialbakers, told AdAge in February.
As Twitter has struggled to grow its user base, its ability to bring in revenue through advertising has become limited. What’s more, the president’s prolific tweeting is not exactly a good thing for the company. Especially if potential advertisers are at the receiving end of his critical tweets. Amazon, Lockheed Martin and Boeing have all seen their shares slip after they were attacked by President Trump on Twitter.
“This is not a platform that advertisers will want to, in advance, associate themselves with,” Richard Kramer, a senior analyst at Arete Research Services, told CNBC. “Can you imagine Nordstrom running a campaign on Twitter, pre-buying it or planning it … and finding out that the president is slating them on the same platform?”
My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!
— Donald J. Trump (@realDonaldTrump) February 8, 2017
Back in February, President Trump accused the store of mistreating his daughter Ivanka Trump after the store said it would no longer sell her products.
“There are certain types of internet content that advertisers don’t regard as brand-safe,” Kramer said. “In the case of Twitter, with the abuse, with the vitriol that’s on it, there’s a lot of brands that just don’t want to be associated with that sort of content.”
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