Since Jack Dorsey et al founded social networking platform, Twitter, in 2006; they have always posted losses. The trend lowered investor confidence in Twitter and this probably prompted it to make some daring changes. One of such recent changes is doubling the number of tweets.
However, the good news today is that this loss trend has now been halted as reports have emerged that Twitter has finally made a profit after 12 years of existence.
The San Francisco-based social network, which went public five years ago, made a profit of $91m (£65m) in the fourth quarter of 2017, compared with a $167m loss a year earlier, after cutting costs.
It also returned to revenue growth, with revenue up 2% year on year to $732m. Twitter made a loss of $108m for 2017. The shares jumped 15% in pre-market trading.
Despite this, Twitter still struggled to increase its user numbers which still stands at 330 million. It is up by 4% from a year earlier. Twitter blamed the fall in numbers on a change to Safari’s app integrations and information quality efforts.
In a letter to shareholders, it said it had stepped up efforts to reduce spam, automated accounts known as bots and fake accounts.
Chief executive Jack Dorsey welcomed “a strong finish to the year,” and added, “I’m proud of the steady progress we made in 2017, and confident in our path ahead.”
The profitability is an important achievement for Twitter, which has lost money consistently since its public offering, sparking speculation on whether it needed to sell itself to keep operating.
We say congratulations to Twitter. But this will be incomplete without asking if Donald Trump-who is a notorious Twitter user-had a role to play in the social media network turning the curve and making a profit.
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