Twitter’s not doing so well with money

Eric Abent - Apr 26, 2017, 9:30 am CDT
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Twitter’s not doing so well with money

Twitter today released a letter to shareholders documenting the progress it made in Q1 2017. Unfortunately for Twitter, the letter doesn’t hold many surprises for those who have been following its business side for a while now. The good news is that things like daily active users are up year-over-year, but the bad news is that Twitter is still having a hard time making money from those users.

Specifically, Twitter says that revenue is down 8% year-over-year to a total of $548 million for the quarter. Of that, $474 million came from advertising – a decrease of 11% year-over-year – while “data licensing and other revenue” came in at $74 million, climbing a healthy 17% year-over-year. Though advertising revenue was down, Twitter said that total ad engagement was up a whopping 139% year-over-year while cost per engagement dropped 63%.

Things are more encouraging when we look at Twitter’s monthly active users, which hit 328 million in Q1. That represents a year-over-year climb of 6% and a roughly 2.8% increase over the previous quarter. Daily active users jumped up 14% during Q1 as well, so Twitter doesn’t seem to be having a difficult time keeping users engaged, just making money from them.

Twitter has been focused on getting people to use the service more often throughout this quarter and the last. This is largely a three-pronged approach, with Twitter looking to refine features, make the social network a safer place, and host live streaming content all in an effort to keep Twitter users engaged.

Some of these new features have worked out well. For instance, Twitter says that 40% of its daily active users visit the recently release Explore tab on any given day. In addition, it says that the changes made to the Twitter timeline and the way notifications are prioritized have increased engagement overall.

On the streaming side of things, Twitter says that it streamed more than 800 hours of content during the quarter and managed to reach 45 million unique viewers. Sports led the charge, followed by news and politics and finally entertainment. That probably won’t change much as we head into Q2, but given these numbers, expect Twitter to keep on live streaming whatever it can as we continue to move through 2017.

So now Twitter needs to address the elephant in the room: how does it stop losing money? The hope is that by offering streaming content, improving features, and implementing safety measures, Twitter can attract more users and get them to spend an increasing amount of time using the service. We’ll see if any of these efforts have improved things at the end of Q2, so stay tuned.

SOURCE: Twitter


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