Twitter failed to attract more monthly users in the second quarter, spooking investors looking for evidence that the company is on a sustainable long-term growth path.
A long-term turnaround depends on Twitter expanding its audience. That number stands at 328 million monthly active users — the same as in the prior quarter, the San Francisco-based company said in a statement on Thursday. Revenue fell 4.7 per cent and the company’s net loss also widened, affected by a $55m (£41m) write-down of the value of its investment in SoundCloud, the German music streaming service.
Twitter is still working to prove that it can build a sustainable, growing business. After hitting a plateau with its user base and struggling with a slowdown in sales, the company started narrowing its focus, shuttering businesses and teams that didn’t fit its goal of being a destination for live-event content. With a goal of reaching profitability, Twitter began investing heavily in video, aiming to draw a more mainstream set of users and premium advertising deals. The network now has a promising set of partnerships in its pipeline, but some investors are sceptical that Twitter will ever be much bigger than it is today.
“It’s a niche platform,’’ said Brian Wieser, an analyst at Pivotal Research. “It always was and always will be.’’
Bloomberg
