Twitter has finally turned a Profit. It’s more a result of cost-cutting as revenues and user numbers have effectively flatlined.
The $91 million profit for the last three months of 2017 was the first profitable quarter in the company’s 12 year history. However, the details suggest this is largely because Twitter has done something other than the usual Internet philosophy of 1) Get more users, 2) ?, 3) Profit!
The switch from $167 million loss in the same period last year to $91 million profit now has very little to do with growth. Revenues only increased from $717 million to $732 million, with the real meat being a cut in costs from $884 million to $641 million.
It also doesn’t appear Twitter is doing significantly better at making more revenue from each user. The average number of people using the site during a month is only up four percent year-on-year and was dead level compared to the past quarter. Meanwhile the number of US users actually fell.
It’s not necessarily a sign that people are abandoning ship en masse: a fair chunk of the “lost” users may actually be bot accounts that have been weeded out. However, it does suggest that in the same way Facebook tends to max out at around half the population of a country, Twitter may have reached its own level; the US figures indicate that’s around a quarter of adults.
There was some further good news for the company, though it might not be welcome to many users. Twitter says the average amount of time users spend on the site has increased, which it attributes to two factors – the switch to a 280 character limit and showing “best” tweets first rather than a strict chronological view – that earned a hostile reaction among the most vocal users.
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