While there was a stalling of the overall growth of users due to a clampdown on fake accounts, the first quarterly profits in its 12-year history was reported by social media platform Twitter.
A string of cost cutting measures at the San Francisco-based social network company resulted n the company reporting a net profit of $91m (£65m) in the fourth quarter of 2017 after about five years since it went public and following a loss of $167 million made by the company last fiscal year.
There was a rise of 2 per cent in revenues generated as it touched $732 million primarily driven by rise in video ad sales. In 2016, the annual loss posted by the company was $457 million while the annual loss for the company in 2017 dwindled down to $108 million. This year, the company is expecting to make its first annual profit. The news of the quarterly profit resulted in rise of Twitter stocks by 20 per cent.
Despite the preference of the social media platform by the United States president Donald Trump and the publicity that it has got unwantedly from the tweets of the U.S. President and a number of other celebrities and political personalities, it has not been able to significantly increase the number of users. There is a concerted effort by the company to reduce the number of fake accounts, automated accounts and spam, Twitter said in a letter to its shareholders.
While the number of monthly active users for the company was at 330 million in the quarter and was 4 per cent higher year-on-year, it was lower than the growth that it had generated in the quarter earlier. Wall Street analysts had expected the company to clock a user base of 332.5 million but it was missed by the company. There was drop of 2 million in the number of users because of a change brought about by Apple in its Safari web browser.
There has been a drop of 1 million users in the US for the company from the 69 million in the previous quarter. U.S. is the market which generates the most revenues for the company.
This social media platform jostles for users with other social media platforms like Facebook which has a much larger user base and revenues with 2.1 billion total monthly users worldwide and even from relatively new entrants in the market such as Instagram and Snapchat.
Twitter said that “cares deeply” about misinformation and the consequential negative impacts on civic discourse and has introduced steps for addressing and reducing abuse of its platform.
However, not enough has been done by Twitter to address the issues of abuse, said Michael Connor. In recent months, two of the large shareholders of both Facebook and Twitter were helped to file resolutions demanding that the companies undertake greater responsibilities for tackling the issues of fake news, abuse and hate speech, by Open Mic group of Connor.
“They are playing whack-a-mole with these problems,” he told AP. “They say they have the problem under control, but they don’t know what the problem is exactly.”