Twitter Fails to Grow Its Audience, Again – Bloomberg

Sarah Frier:

Twitter Inc. failed to attract more monthly users in the second quarter, spooking investors looking for evidence that the company is on a sustainable long-term growth path. The shares tumbled the most in nine months, even as quarterly revenue topped analysts’ projections.

A long-term turnaround depends on Twitter expanding its audience. That number stands at 328 million monthly active users — the same as in the prior quarter, the San Francisco-based company said in a statement Thursday. Revenue fell 4.7 percent and the company’s net loss also widened, affected by a $55 million writedown of the value of its investment in SoundCloud, the German music streaming service….

“It’s a niche platform,’’ said Brian Wieser, an analyst at Pivotal Research. “It always was and always will be.’’

It’s looking increasingly certain that Twitter is a niche product. It always will be. It’s never going to get any bigger than it is.

On the other hand, 328 million users is staggeringly huge. It’s a bigger population than nearly every nation on Earth.

Can Twitter achieve long-term stability continuing exactly as it has been? The market wants growth, particularly from tech companies. The market punishes mere sustainability.

Twitter may need to go private to survive.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.