Twitter reported a sequential drop in user numbers in its fourth-quarter earnings report, after which its shares dived by more than 4% on Thursday. This has not shaken the confidence of the company’s COO, Adam Bain, who is confident that it will do well in the near future. On Thursday, Bain attempted to highlight the company’s product innovation, revenue growth and business units.
A big opportunity for marketers
Twitter recently introduced an option that makes it possible for users to see relevant tweets. This is a huge change from the platform’s standard display in reverse chronological order. Before officially announcing the change, some reports revealed the company’s plans, resulting in a storm of criticism this past weekend. But Bain said that delivering real-time information will continue to be the company’s focus.
Speaking on CNBC’s Squawk on the Street, he said, “We’re focused on live because we think live is actually a really powerful part of the platform, whether live video or live information. On the product side, we’re focused on refining an iconic product, and with this focus on live, we know that we will see a return to user growth.”
There has been much talk in recent years about disruption and trying to pick companies that will disrupt their industries. The debate continued at the Morningstar Investment Conference as Bill Nygren of Oakmark Funds faced off with Morgan Stanley's Dennis Lynch. Q2 2021 hedge fund letters, conferences and more Persistence Morningstar's Katie Reichart moderated the Read More
In 2015, Twitter’s user base essentially remained stagnant at 300 million, raising concerns about future revenue growth. Talking of the 500 million people who see tweets but do not have Twitter accounts, Bain stressed that there are actually 800 million users on the platform, representing scope and scale for marketers.
Twitter has diversified services
Many believe the micro-blogging firm should lay more emphasis on selling user data and open its API (application programming interface) rather than emphasizing on advertising revenue. This will allow third-party developers to create applications for the platform. To this, Bain replied that Twitter is already diversified and gave examples: syndicated ads, data, and licensing, plus its advertising exchange, MoPub.
For 2015, Twitter announced revenue growth of 60% on a year over year basis. Earnings for the quarter came in at 16 cents per share, beating estimates by 4 cents, and revenue was $710 million, which was in line with the consensus. For the first quarter, the company is expected to post revenue of between $595 million and $610 million versus Wall Street’s expectations of about $633 million.