Twitter’s fake user 'health' cull sees stocks drop 20%
Twitter saw stocks plummet by over 20% ahead of the weekend, following an announcement that its monthly active users had fallen by one million throughout Q2 against the previous quarter.
Announcing that users had fallen from 336m to 335m was enough to send share prices down to just under $35 (they’ve continued a decline since). That's despite the company reporting record quarterly profit of $100m (£76m) and a 23 percent year-on-year uplift in ad sales accounting for revenue $601m (£458m) while growing its data licensing and other revenue business, which was up 29 percent year over year.
According to Twitter’s CEO, Jack Dorsey, the user decline could be attributed to a wide-scale removal of fake, inactive and offensive accounts in efforts to improve user experience crack down on fake news, abusive content and political influence.
"Our second-quarter results reflect the work we're doing to ensure more people get value from Twitter every day," said Dorsey.
"We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviours that distort and distract from the public conversation."
Dorsey called this “health work” and suggested that improving the quality and experience of discussions on the platform would be a growth factor for the long term, but warned of a continued user decline in “mid-single-digit millions” into the third quarter as the initiatives carried on.
On a smaller scale, Twitter conceded that GDPR (General Data Protection Regulation) laws requiring account holders to agree to new policies had had an impact on user numbers, as well as not forming paid SMS carrier partnerships within certain markets, allowing users with low data plans to post tweets via text message.
Twitter’s shock drop came just a day after Facebook suffered a record loss, losing $120bn (£91.5bn) in share value, with data privacy scandals and other “headwinds” contributing to the platform’s slowest-ever period of growth, and it’s likely Twitter could have felt a collateral and magnified loss of investor confidence in social media platforms as a result.
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