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Twitter growing revenues on slow user growth

July 29, 2015 - tech
Twitter growing revenues on slow user growth

Twitter reported earnings yesterday and beat expectations on revenue growth of 61% year-over-year on 15% user growth in the same period. Jack Dorsey’s argument was the user friendliness of the platform where Twitter achieved huge brand awareness internationally yet with a core group of heavy users. According to Noto (Twitter’s CFO), mass market hasn’t yet adopted Twitter arguing that the product is too difficult to use.

The key question from users is “Why should I use Twitter”? Noto disclosed they are in the process of hiring a CMO but cautioned that getting to mass market will take considerable amount of time. According to FT:

That Twitter has managed to record better revenue growth in those conditions shows skill in squeezing more ad dollars out of existing users. As a not-unimportant nugget, that should strengthen the potential CEO candidacy of Adam Bain, who “oversees Twitter’s worldwide monetisation efforts” and is seen as a possible successor to the departed Dick Costolo — and not just because everyone else has left the building.

Noto said they are about to reach 100,000 advertisers and will focus on video autoplay, improving creating design, and other features that will improve marketing ROI. In my view the product is extremely simple (140 characters) and has achieved network effects within its core group. That said, the more “advanced” use of the product (hashtags, direct messaging, embed content) is still not accessible for mass market.

By the way, how cool was it to watch the earnings call via Periscope (click here)?

twtr-earnings

Source: Twitter: low altitude – FT.com

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