Twitter Is Close to Flatlining

Twitter can’t catch a break. For the past two years, the company has been criticized for its lackluster user growth and now that it finally shows signs of improvement, revenue growth appears to have hit a wall. In the fourth quarter of 2016, Twitter’s revenue grew by less than 1 percent to $717 million. Making things worse, advertising sales, accounting for nearly 90 percent of the company’s revenue, actually declined. Much to the displeasure of its shareholders, Twitter warned that revenue growth may continue to trail user growth, attributing the weakness in part to “escalating competition for digital ad spending”.

During the earnings call, Twitter’s CFO Anthony Noto acknowledged that President Trump’s intense usage of the microblogging service was beneficial to the company's business as it “shows the power of Twitter”. If more people were as enthusiastic about Twitter as a communications tool as Donald Trump apparently is, the company wouldn’t be having any problems selling advertising.