Shares plunge 10% as revenue falls short of analysts estimates amid modest gain of 3 million users
Twitter is battling for a share of the internets booming video advertising budgets, its executives said on Friday, as the company reported its slowest growth in quarterly revenue since going public in 2013.
Facing increasing competition from fast-growing competitors such as Snapchat and Instagram, Twitter is attempting to encourage users to stay longer on the platform by adding more live video content from Periscope and on Twitter itself.
It has signed 250 media partners across politics, sports and entertainment, introducing ways to watch live video and simultaneously comment including live broadcasts of the Republican and Democratic party conventions in July.
Were working every day to make Twitter faster and more intuitive to use, said its CEO, Jack Dorsey, introducing changes to the timeline, character count and reply rules. We have exciting momentum on live video on Periscope and on Twitter.
Adam Bain, Twitters chief operating officer, said that video now accounts for the majority of Twitters advertising revenue. One year ago those products [Twitters video advertising offering] did not exist, he said. Theres a whole new set of video budgets out there a <a href=”http://www.emarketer.com/Article/Mobile-Spearheads-Digital-Video-Advertisings-Growth/1013611″ data-link-name=”in” body link” class=”u-underline”>$10bn marketplace in the US alone.
Bain said there had been strong demand for advertising around its NFL content, including the brands Sony, Nestl, Verizon and Anheuser-Busch.
Twitters user base, however, modestly increased to 313 million average monthly active users in the second quarter, up from 310 million in the first quarter.
The company, which has been struggling with stagnating user growth and lower spending by advertisers, is doubling down on efforts to attract users.
Under Dorsey, the company is working to better define its role in the growing social media landscape. Twitter rolled out a video ad this week that showed it as the place to go for live news, updates and discussion about current events.
The microblogging service operators shares plunged 10% in extended trading as revenue for the quarter fell short of analysts estimates. Revenue forecast for the current quarter also came in below estimates.
Twitter forecast current quarter revenue of $590-$610m, well below the average analyst estimate of $678.18m.
Excluding items, the company earned 13 cents per share, topping the average analyst estimate of 10 cents.
The companys net loss narrowed to $107.2m, or 15 cents a share, in the second quarter ended 30 June, from $136.7m, or 21 cents a share, a year earlier.
Revenue rose about 20% to $602m, missing the estimate of $606.8m.
Read more: https://www.theguardian.com/technology/2016/jul/26/twitter-quarterly-report-slow-growth