Twitter Inc Questioned By SEC On User Engagement Metric

Twitter Inc Questioned By SEC On User Engagement Metric

Twitter has been changing its user engagement metrics at regular intervals, and this is being noticed by the U.S. Securities and Exchange Commission. How often people view their Twitter streams is measured by the number of timeline views. The micro-blogging firm used to report this number, but earlier this year, it stopped this practice.

Why Twitter does not report timeline views

In April, The SEC questioned Twitter regarding the alternative metrics it will be using in place of timeline views, according to a statement released by the agency on Monday. Twitter is growing at a much slower pace than it had expected. The number of active users is not increasing, and this is a major concern for the company. Users’ interest in the micro-blogging platform’s products was gauged with the help of timeline views, which was previously considered an effective metric. Then changes in the services made by the company, such as making navigation to other pages easier without leaving the page, led to a declining number of timeline views.

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As a result, the micro-blogging firm had to shift the focus of its measurements as well. If it had continued with timeline views, then it would have given a negative impression about its growth, even if there were improvements in the product, says a report from Bloomberg.

The SEC also questioned Twitter on its increasing foreign losses. Regulators also asked if the company should disclose foreign income tax rates or not. Twitter responded by saying nothing unusual has happened, adding that it will “monitor a need for any additional disclosures.”

More questions from the SEC

The SEC also questioned Twitter about metrics for measuring user attention and demand, changes in ad engagements and fluctuations in cost per ad engagement. According to the agency, Twitter said it doesn’t use revenue per advertiser for tracking its business, and therefore, those numbers do not hold any importance for investors.

The agency also asked Twitter to explain different streams of revenue from advertising types. Twitter, however, refused to break out those results, saying the overall number “offers investors better insight to the operational effectiveness of the company.”

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