Twitter revenue drops despite an increase in number of users

Brittany BishopApr 27, 2017

FILE - In this Thursday, Oct. 27, 2016, file photo, the Twitter logo appears on a phone post on the floor of the New York Stock Exchange.

Twitter's share price has been on a slow slide.

Twitter's revenue, however, fell 7.8 percent to $548.3 million in the first quarter, its first drop since its initial public offering.

U.S. President Donald Trump, one of the most active politicians on Twitter, has tweeted about five times a day on average since his inauguration in January, according to social media analytics company Zoomph.

Twitter shares were up 11 per cent at US$16.23. In March, Twitter said it would use algorithms to weed out abusive accounts, and allow users to mute keywords, phrases or full conversations for as long as they want.

Twitter is also doing a better job as rolling out new products, and meeting the needs of average users, said Dorsey.

Twitter (NYSE:TWTR) shares rallied more than 10 percent in pre-market trading on Wednesday, following better-than-expected results for the quarter. Still, it'll be tough, given the competition.

All this still leaves looming questions: Can it get any worse? The company is working on highlighting its return on investment to advertisers and securing better pricing in upfront deals, while also simplifying its ad product portfolio and growing data licensing revenue (+17% in Q1). First-quarter earnings, excluding some items, came in at 11 cents a share, well ahead of the 1 cent analysts estimated. Efforts to curb abuse and harassment have led to a decrease in reports and blocking from users, which the company described as "meaningful progress". Twitter streamed over 800 hours of live premium video to reach 45 million unique viewers in the first quarter, representing a 31% sequential increase. That follows a slight decline in ad revenue last quarter as well. Still, it hasn't been enough to accelerate overall sales. But the benefit of investing more in that market could take some time to make it to the balance sheet, the company said.

Video remains a key plank in Twitter's strategy, with the company's ultimate long-range goal to be to deliver nonstop live video on the platform. However, despite outdoing Wall Street predictions the businesses' revenue is in decline, decreasing by a total of 8% year-on-year.

Though Twitter didn't say specifically that Trump's constant - some might say compulsive - tweeting was responsible for the modest growth, but Chief Operating Officer Anthony Noto said that usage by politicians appears to have contributed to the gains.

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