Despite Presidential Surge, Twitter Fails to Generate Profit - The UpStream

Despite Presidential Surge, Twitter Fails to Generate Profit

posted Sunday Feb 12, 2017 by Scott Ertz

Despite Presidential Surge, Twitter Fails to Generate Profit

Today, there seem to be 2 groups that are enamored with Twitter: President Donald Trump and the news, though the interest from the news tends to be in reporting on what Trump has tweeted. Despite the surge in usage because of the President, Twitter has not been able to capitalize on its usage gains.

The company posted its quarterly earnings this week and despite the focus from the media, the President and increased traffic from sports, the company only had a 1% increase in sales, totaling $717 million. The important number, however, is their losses, up 86%, from $90 million last year to $167 million this year. That puts the losses at about 25% of the total sales. The losses were higher and the sales were lower than expectations.

This has been a constant trend for the company, however. Since their Initial Public Offering in 2013, the company has struggled to find revenue, despite consistent gains in usage. In fact, before their IPO, the company struggled to find a business plan of any sort. In the last year, these problems have been so bad that they have actually looked for a buyer for the company. To date, all interested parties have ended discussions.

It's possible, however, that this most recent quarter of trouble will lead the company to renew its search for a buyer. It's possible that some of the formerly interested parties could come back to the table or somebody new might enter the fray. The problem, of course, will continue to be how to monetize the service, or at least the data. Companies like Microsoft, Google and Amazon could use the data to improve their search, AI and marketplace services. It does, however seem far fetched that anybody will figure out how to properly monetize the product as it stands today.


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