The Strategist

Twitter: Change the Way You Count It

07/29/2015 - 15:11

The number of active Twitter users for the II quarter 2015 increased by 8 million? Perhaps, but only on the basis of those who use the service through SMS. In reality, the increase amounted to only 2 million users. Shares of the social network have fallen in price.
Announcing the financial results for the II quarter of this year, microblogging network Twitter said that the number of active users reached 316 million people. Even in the I quarter there were just 308 million. It later emerged that the figure includes people, who are not using the web-based or mobile applications, but only sending text messages to a special short number.

Real growth of Twitter’s audience was more modest. During the reporting period, additional 2 million people began to use the service. Excluding SMS-users, the audience has grown to 304 million against 302 million in the previous quarter.

Chief Financial Officer Anthony Noto has already told in April that he plans to include people, who use the service via SMS, in the statistics. He explained that the experts, who often criticized the service for the weak growth of the audience, do not account for those who do not use Twitter directly through the website or application.

On the financial side, Twitter’s indicators were better than expected by investors in the market. The company reported an increase in revenue to $ 502 million and earnings of $ 0.07 per share. Experts had forecast $ 0.04 per share.

After the publication of the report, Twitter shares rose 4%, but they soon returned to its previous level and even fell by 11.3%, to $ 32.41 per share. One reason for the fall in the value of the securities began to stop the growth of the audience. Thus, the number of active users of the service in the United States remained virtually unchanged since mid-2014 and is about 66 million people.

Another problem is the mass exodus of employees. According to Financial Times, more than 450 employees had left Twitter in the past year, or about 12% of the company staff. At the same time, the number of Twitter’s employees worldwide has increased by 18%.

Earlier this month, Dick Costolo, CEO of the company, left his post. The fact that he decided to resign became known in June. Despite the fact that Costolo left the position, he retained a seat in the Board of Directors.

One of its founders - Jack Dorsey-  is temporarily running the company. Experts believe that the decision was taken due to the slow development of the company compared to other social media such as Facebook and Instagram. Twitter’s shareholders have constantly criticized the direction for the rather weak results since the IPO in 2013.

A special commission consisting of three members of the Board of Directors Search will set out to look for a new leader. The quest for CEO will be carried out both within the company and beyond.

Anthony Noto, as well as top manager Adam Bain are called Dick Costolo’s possible successor as CEO of Twitter. In addition, the American rapper Snoop Dogg has declared his readiness to lead the company.


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