Wake in flight
26 October 2016 | 0
Later this week Twitter will announce its third quarter financial results for 2016 and, in all likelihood, a further 300 job losses. For a high-visibility social network with income on an upward curve, this beggars belief. Year-on-year the first and second quarter of 2016 comfortably beat out same periods in 2015. In the last quarter alone advertising revenue was up 18% from $513 million to $535 million; income from data licensing and services was up 35% from $56 million to $67 million; and overall revenue year-on-year was up 20% from $569 million to $602 million. However the last quarter still recorded a net loss of $107 million, leaving the company in the hole. In order to get out of that hole it needs to substantially grow its user base beyond its current 313 million monthly active users. The trouble is, it can’t. Because Twitter is failing at any social network’s main job: being popular.
For the second quarter, monthly active users increased by 1 million – that’s a meagre 1% year-on-year. For a bit of context, in the same period Facebook brought in 60 million new users and Snapchat is on track to grow its user base by 27.2% for this year with an expected user base of 217 million by the end of 2017.
What’s even more alarming for Twitter is that it hasn’t managed to grow its audience during the most bilious US presidential election in history, where every news story breaks on social media and every news report seems to have some sort of comment in 140-character form. The firebrand commentators of the alt-right make for great entertainment but their base is installed on the platform and they’re not proving a draw. You can only do so much rubbernecking before a misplaced hashtag puts you in harm’s way.
The antics of social media hate mobs descending on anything from this year’s Ghostbusters remake to the Black Lives Matter movement have leant Twitter’s hivemind a schizoid quality, where ‘free expression’ is used as a flag of convenience by trolls and xenophobes to justify hate speech and by the company itself as an excuse to let them continue hurling invective. To borrow a phrase, it’s not a ‘safe space’ and that’s turning people off.
So what to do? What else can you do? Sell up. And quick.
Over the past few weeks reports emerged that Twitter was looking to sell itself to any one of Salesforce.com, Google parent company Alphabet or Disney. One by one the suitors stepped away from a deal. Neither the Twitter platform nor its associated user data proved enough to offset the fact that Twitter is one of social media’s most toxic brands right now. Whatever the technical reasons behind Salesforce.com and Alphabet’s decisions, you know the Mouse House does not want any part of a network that has served as a mouthpiece for hate groups and can’t get a handle on how to put a lid on them.
Twitter’s former CEO Dick Costolo famously said the company “sucks” at dealing with trolls and when his replacement, Jack Dorsey, returned it was hoped he’d be able to make progress on the problem. In the end there wasn’t even a bidding war and shares dropped 5.8%.
So when will Dorsey’s team realise that a social network without moderation isn’t much of a network at all? If the threat of abuse is so pervasive and the best bits get coverage in the mainstream media, why would anyone bother to sign up? Personally, my twitter feed is full of breaking news and snappy commentary – it’s marginally better than an RSS reader.
If Twitter wants to become a viable acquisition target it must get serious about being a place for civilised discussion. As ‘curated networks’ like Snapchat and WhatsApp thrive, Twitter is in danger of representing the face of a dated social Web, as commercially viable as Reddit or 4chan. For a company with ambition, that’s not a good connection.