By Adam Fraser
The storm clouds above Twitter show no sign of abating. Third quarter 2015 results just announced showed tepid performance in both user growth and financial returns.
Another large quarterly loss of over US$100m. Monthly active users grew by only 4m to 320m. A rounding error to Facebook.
The Street is losing patience as the share price falls (down another 13% when the results were released).
A new CEO is making decisions – no question – but are they still missing the wood for the trees? Cutting costs, bringing in a new chairman, adding new features but still almost exclusively looking to advertising as the monetisation business model.
Will Twitter ever be a pure advertising, media buying play? When Twitter listed that is what the Street wanted as it was a business model which it was familiar with. Sell media, sell attention.
But given the nature of the Twitter platform – it cannot just be assumed to behave like TV, radio and magazines. Twitter is a medium of connection at its heart. It’s data is exceptionally valuable. It is more an infrastructure than a media platform into why you sell “space”.
Of course if Twitter hadn’t floated and was able to grow at its own natural pace and make long term decisions without extensive external pressure, we wouldn’t be having this discussion. But that horse has bolted.
It’s hard to see a particularly happy ending here with Twitter as an independent public company.
Facebook is directly attacking Twitter’s USP as “the place where news breaks”. User growth shows no sign of breaking out. New features are being added but will they disenfranchise the power user base?
A takeover or a buy out to take Twitter private is not out of the realms of possibility.