Feb 112016

Poor Twitter. Today’s earnings report showed what everyone knew, its user growth has stalled with the number of active participants – Monthly Active Users as the company calls them – didn’t grow in the last quarter and are only up nine percent on the previous year.

The good news for shareholders is advertising revenue grew 48% with both US and international markets showing strong increases. Despite user growth flatlining the company still remains on track to becoming profitable.

As Farhad Manjoo argues at the New York Times, maybe the service needs to focus on more modest ambitions. The company’s dreams of competing with Facebook or growing like Google are never going to be achieved.

We’ve argued at this blog for a year that Twitter’s management and investors should accept the market’s expectations of the business were too lofty and while there’s no reason the company can’t be profitable, it’s not going to be a massive river of gold like Google.

There’s nothing wrong with being a healthy billion dollar business. The risk for Twitter is the greed and ego of investors, founders and shareholders could condemn the company in trying to meet impossible expectations.

  One Response to “Rescoping Twitter”

  1. The act of greed has already happened, look at what the execs cashed in since the IPO. Stock-based compensations are important, but what $TWTR did was just reckless. No wonder Wall Street hates this company.

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