Twitter's Wings Have Been Clipped

Published on: February 28, 2019 / Updated on: February 28, 2019 – Author: Konrad Wolfenstein

Although Twitter's fourth-quarter earnings report exceeded expectations for both revenue and profit, the company's stock price fell by nearly 10 percent. The reason for the harsh market reaction was the same old problem the company has faced for years: disappointing (or in this case, nonexistent) user growth. Twitter's monthly active user base shrank by 9 million users in the fourth quarter compared to Q4 2017, marking the third consecutive quarter of negative growth for President Trump's digital megaphone.

To solve this problem, Twitter is taking a page from Apple's playbook. Just as the iPhone maker will no longer disclose sales figures for its products, presumably because sales aren't as good as they used to be, Twitter will simply stop reporting monthly active users in the future and instead focus on daily active users, which, somewhat conveniently, are still growing.

Despite beating expectations on both the top and bottom lines in its fourth quarter earnings report, Twitter's share price fell nearly 10 percent. The reason for the harsh market reaction was the same old problem that the company has been having for years now: disappointing (or in this case non-existent) user growth. Twitter's monthly active user base shrank by 9 million users in the fourth quarter compared to Q4 2017, marking the third consecutive quarter of negative growth for President Trump's digital megaphone.

To address the problem at hand, Twitter is taking a page out of Apple's playbook. Just like the iPhone-maker will no longer reveal unit sales for its products, presumably because it doesn't look as good as it used to, Twitter will simply stop reporting monthly active users going forward and focus on daily active users instead, which somewhat conveniently are still growing.

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