Is the Twitter boat sinking?

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The Twitter boat which can only support 140 characters at a time is stumbling continuously. The social media company reported its first-quarter earnings on Tuesday and the performance is below expectations. Where analysts were predicting $608 million in revenue in the first quarter which would have been a 39 percent rise from the last year, the company posted $595 million.It also lowered revenue guidance for next quarter, to a range of $590 million to $610 million.


However, Twitter has crossed the expectation on earnings per share, reporting 15 cents where analysts had estimated 10 cents, vs. 7 cents in the first quarter of last year. Also, Twitter beat expectations for monthly active users, adding 5 million for a total of 310 million, vs. expectations of 308 million.

User growth is a big story for Twitter. Last quarter, Twitter registered a decline in user base and that was when it launched Moments, its news-summary feature to try and demonstrate Twitter's value to skeptics.

Twitter's stock fell more than 12 percent in the aftermath of revenue postings.  The stocks have been getting hammered for the past year, down 24 percent since January.


The answer to why the earnings aren't good enough and the stock is falling is written in the company's shareholder letter: "Revenue came in at the low end of our guidance range because brand marketers did not increase spend as quickly as expected in the first quarter." Basically, it means that advertisers aren't as convinced of Twitter's value as Twitter needs them to be.

Though Twitter has retained its big brand advertisers, it has failed to develop an enormous self-serve ad platform in the manner of Google and Facebook. Since last year, Twitter has brought many changes - Replace CEO Dick Costolo with co-founder Jack Dorsey, launch Moments, television ad campaign, and improve tools to report harassment and abuse - allowing longer direct messages - but nothing seems to be working for the betterment of the company.

As a response to the current numbers, the letter said, "We're focused on what Twitter does best: live. Twitter is live: live commentary, live connections, and live conversations. Whether it’s breaking news, entertainment, sports, or everyday topics, hearing about and watching a live event unfold is the fastest way to understand the power of Twitter."

CIOL is the Twitter bat sinking?

However, when rivals - Snapchat live stories is claiming 10 to 20 million users per day and Facebook Live is claiming 1 billion monthly active users - Twitter no longer owns that niche.

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