Twitter reports that after a year of slashing expenses and putting itself in a position to sell data to other companies, it’s expected to be profitable. What’s surprising (considering how #huge Twitter is) is that this the first time that it will be profitable based on “generally accepted accounting principles” – #GAAP!.
In the 11 years since Twitter took to the field, it has never once met this standard, operating at a loss of nearly 2.5 billion dollars since its inception.
Twitter has struggled of a number of reasons, but particularly after going public in 2013 it suffered declining user growth, the rise of the #twittertrolls (coincidentally, Troll’s are discussed in my favorite TIME piece about the internet – located here), and competition from Facebook for the tough realm of advertising.
Since 2013, shares fell steadily, but things have increased thanks to some optimistic changes – the promise to crack down on harassment and abuse, a feed arranged by algorithm instead of time, and Twitter’s most vocal fan of late, President Donald Trump.
For the numbers fans, Reuters provides some input: Twitter’s loss narrowed to about 21 million down from 103 million this year. They have worked to cut a great deal of expenses -16 percent across the board broadly impacting sales, marketing, and R&D.
This kind of focused core improvement (can) help tip the balance sheet on the expenses side – but generating revenues remains a challenge due to slow growth. Twitter hopes to relieve this by working out some deals to sell data – the currency of the 21st century.
Several months ago, TechCrunch made perhaps the most important observation – that despite the fact Twitter has changed the world, changed our marketing, and empowered us to connect with other people, it has remained unprofitable. Many small and large businesses profit from Twitter, but in these 11 years the company hasn’t #sharedinthewealth.
Twitter is touching every realm of business and for American’s, is touching every aspect of their lives given its new form as the preferred medium of the political sphere. Given that, they have much to do to change.
Facebook commands an audience five times the size of Twitter – and their ability to reach success for the future seems #questionable. And how Twitter’s success changes the scape of influence, outreach, and entrepreneurship is something else to be seen.
