March 21 2018

Twitter Falls As User Growth Remains Stagnant

March 21 2018, 12:41 | Jodi Jackson

Twitter Falls As User Growth Remains Stagnant

Twitter Falls As User Growth Remains Stagnant

Twitter reported its second-quarter earnings today, and it did not go over well.

Twitter did not respond to The Daily Caller News Foundation's request for comment by the time of publication.

Twitter has been performing relatively well in recent quarters, reporting steady increases in the number of active users. Twitter will never be Facebook, and that is clearer than ever. In the United States, monthly users actually declined slightly to 68 million from 70 million.

But according to Twitter's shareholder letter, the platform had made major changes that should have been reeling in the users. The company claims that it's growing at 12 percent for the quarter compared to 2016, but investors aren't going to be thrilled at Twitter's audience essentially stagnating.

"Twitter has this real conflicted image that it's full of neo-Nazi trolls and it's also a great place for breaking news", says Michael Pachter, an analyst with Wedbush.

Facebook just grew its monthly users by 3.6 percent, slightly down from the prior quarter's 4.3 percent lift.

With users, Twitter also touted its work curbing abusive accounts on the platform with updates like its quality filtering. "We take action on 10 times the abusive accounts daily compared to this time previous year". Handling hate speech and other persistent targeted abuse has been a struggle for Twitter and the service's inability to curb these users reportedly prevented a potential purchase by Disney past year. The results weren't bad as the company surpassed analysts' expectations on the revenue and earnings front.

Twitter shares have increased 20 percent since the beginning of the year.

For years, Twitter has struggled to attract people who feel the social network is overly confusing, or a hotbed for harassment. During the quarter, 55 million people tuned into Twitter's "premium" broadcasts, which include Major League Baseball games, Bloomberg News shows and Live Nation concerts, compared to roughly 43 million who watched in the Q1 2017. Finally, BMO Capital Markets restated a "hold" rating and set a $17.00 target price on shares of Twitter in a report on Monday, April 17th.

It failed to match the meekest of estimates too, which predicted a growth of a million users in the quarter.

"There is a Trump effect", said one agency executive, who spoke on condition of anonymity because of close ties to Twitter's ad team. He has also developed tools to monitor brands' early adoption of live-streaming apps, compare Yahoo's and Google's search designs and examine the NFL's YouTube and Facebook video strategies.

A few other notes: Cost per engagement was down more than 50%, while total ad engagements grew 95%, year-over-year.

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