Twit­ter sees road to profit with staff cuts

The Myanmar Times - - International Business -

STILL los­ing money and without a merger part­ner, Twit­ter sees a path to prof­itabil­ity as the strug­gling so­cial net­work un­veiled job cuts as part of a re­or­gan­i­sa­tion.

The mes­sag­ing plat­form said it would cut 9 per­cent of its work­force after an­other money-los­ing quar­ter, but sug­gested it could reach prof­itabil­ity for the first time next year.

“We have a clear plan, and we’re mak­ing the nec­es­sary changes to en­sure Twit­ter is po­si­tioned for longterm growth,” chief ex­ec­u­tive Jack Dorsey said.

How­ever, an­a­lysts re­main scep­ti­cal about the com­pany’s outlook for ex­pan­sion, ex­press­ing con­cerns about its abil­ity to en­tice users be­yond its core base.

Twit­ter re­ported a net loss for the quar­ter of US$103 mil­lion, com­pared with $132 mil­lion a year ear­lier. Rev­enues grew 8pc to $616 mil­lion, mostly from ad­ver­tis­ing.

The key met­ric of monthly ac­tive users rose only mod­estly to 317 mil­lion from 313 mil­lion in the prior quar­ter – a growth pace that has prompted con­cerns over Twit­ter’s abil­ity to keep up in the fast-mov­ing world of so­cial me­dia.

The re­struc­tur­ing “is to cre­ate greater fo­cus and ef­fi­ciency to en­able Twit­ter’s goal of driv­ing to­ward prof­itabil­ity in 2017”, the com­pany said.

Twit­ter was re­ported to be in talks to find a buyer, and has held meet­ings with Google par­ent Al­pha­bet and cloud com­put­ing gi­ant Sales­force.

But no deal ma­te­ri­alised, with Sales­force say­ing Twit­ter was not a good fit for the group.

Sep­a­rately, Twit­ter said it would dis­con­tinue its loop­ing video ap­pli­ca­tion Vine in the com­ing months.

Al­though Twit­ter’s 2013 pub­lic of­fer­ing was among the sec­tor’s most an­tic­i­pated, shares have been slump­ing after only a brief rise. The com­pany’s mar­ket value is about $12 bil­lion based on its most re­cent share price.

Twit­ter has since added new ser­vices such as live video, in­clud­ing part­ner­ships with sports or­gan­i­sa­tions and new ad­ver­tis­ing op­tions. It has also drawn large au­di­ences for events such as the US pres­i­den­tial de­bates and NFL foot­ball games.

Still, an­a­lysts re­main cau­tious about Twit­ter’s abil­ity to break out of its rut and ac­cel­er­ate growth. It is far be­hind Face­book, which has an au­di­ence of more than 1.7 bil­lion, and Face­book-owned In­sta­gram, with some 500 mil­lion. –

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