Twitter has impact and influence — but not cash or growth

Twitter’s role as a megaphone for the U.S. president, countless celebrities and businesses hasn’t attracted regular people to the service, not in the way Facebook has, or even Instagram and Snapchat.

The San Francisco company’s latest earnings report and dismal forecast suggest that this is unlikely to change in the near future. CEO Jack Dorsey acknowledged long ago that Twitter needs to do more to grow its user base and convince people why it is useful.

“The whole world is watching Twitter. While we may not be meeting everyone’s growth expectations, there’s one thing that continues to grow and outpace our peers: Twitter’s influence and impact,” Dorsey said in a conference call with analysts on Thursday. “You don’t go a day without hearing about Twitter.”

But that doesn’t amount to much if Twitter can’t translate the influence into boosting its user base, advertising and revenue.

While Dorsey and Twitter have taken major steps recently to address some of users’ biggest concerns, including clamping down on hate speech and abuse, this has yet to make a notable difference in drawing new users.

For the final three months of 2016, Twitter averaged 319 million monthly users, up just four per cent from a year ago. Facebook has about 1.86 billion.

Meanwhile, Twitter has yet to address other issues, including simple ones such as the ability to edit tweets.

“Just like Myspace perhaps Twitter does not what to ‘change the formula’ for fear of losing its unique simple user experience, but the shareholders and CEO Jack Dorsey are running out of time,” Mark Skilton, a professor at Warwick Business School, wrote in an email.

A lean profit outlook sent shares of Twitter Inc. plunging 12.34 per cent, or US$2.31, closing at US$16.41 in New York trading Thursday.

The social media company expects between US$75 million and US$95 million in adjusted earnings this quarter before interest, taxes, depreciation and amortization. That’s far less than the US$191 million that Wall Street had been expecting, according to FactSet.