Since its inception several years ago, Twitter has become like a modern newspaper. The social media platform has develop into a means for many people to receive up to date news daily. However, the latest reports from the Wall Street states that the company’s revenues are declining and the stocks do not reflect on the real performance of the company.
Though Twitter is increasingly adding other product categories on its podium including the mobile, social media, and video, the company seems to be facing stiff competition from its rivals including the two giant companies, Google and Facebook. Twitter’s latest earnings report reveals that the company’s stock has continuously been under pressure. For instance, the total revenues dropped to 5% to about $574 million and the revenues from ads fell 9% after the first quarter overall performance.
Twitter’s situation may continue to deteriorate the rest of the year. The management recently wrote a letter to shareholders stating that though there are impressive improvements in the overall performance, the company is not expecting any significant growth in the revenues in the remaining quarter due to tough economic periods experienced at the moment. With the user base constantly languishing, it will be hard for Twitter’s stock to retain its position in the market.
Furthermore, active users are leaving the platform on a daily basis and if the trend continues, the ads may also follow soon. Although Twitter could not give the reason behind its decline in the US market, the company is blaming its recent revenue decline on the TellApart, the desktop retargeting podium that Twitter bought in 2015 to recharge its suffering direct-response business, which didn’t pay out as anticipated.
The competition on the market has become fierce for small companies like Twitter which may not have the financial resources to compete with stable companies such as Google, Facebook, Snap and much more. According to Brent Thill, the Jefferies analyst, Twitter’s efforts to become a digital live video provider will be crashed by the giant competitors such as Google and Facebook that have stronger digital video products.