Coverage: Twitter shares jump 13% on strong growth
Shares in Twitter Inc. jumped 13 percent on Tuesday after the social media company reported quarterly revenue above analyst estimates, the result of weeding out spam and abusive posts and targeting ads better.
Angela Moon of Reuters had the story:
New ad formats, partnerships with content providers like the U.S. National Basketball Association and efforts to patrol abusive content are helping Twitter better compete for advertising dollars, executives said.
Social media companies have been under pressure over privacy concerns and political influence activity. Twitter has removed thousands of spam and suspicious accounts, which it blamed for sequential declines in monthly users in recent quarters.
Twitter executives said they saw opportunities for selling ads that earn revenue when users visit websites or download apps, citing success with major brands like Walt Disney Co. The company is looking to grow its sales team in 2019 to better serve big advertisers.
“Something where you see a blending of performance and brand is the Star Trek ad that Disney is running right now, where I click through to make sure that I’d be notified when more information was available about the next Star Wars,” Twitter Chief Financial Officer Ned Segal told analysts.
Lauren Feiner of CNBC.com reported that Twitter is changing how it measures users:
This quarter will be the last for which Twitter reports monthly active users (MAUs), the company announced during its last earnings report. As a replacement, Twitter began to report what it calls monetizable daily active users (mDAUs) last quarter, which it said would better reflect its audience. This metric includes “Twitter users who log in and access Twitter on any given day through Twitter.com or our Twitter applications that are able to show ads,” according to the company.
Twitter reported 134 million average mDAUs for the first quarter, compared with 120 million a year earlier. In the fourth quarter, Twitter said it had 126 million mDAUs.
In the U.S., Twitter reported 28 million average mDAUs forthe first quarter, compared with 26 million a year earlier. It reported 105 million average international mDAUs for the first quarter, compared with 94 million a year earlier.
The shift to a new metric came after Twitter reported MAUs that fell short of analyst estimates for two straight quarters during its fiscal year 2018. Twitter previously blamed the shortfall in part on a July 2018 purge of “locked” accounts that was meant to get rid of bots and fake users, among other factors. Twitter said the 330 million average MAUs it reported for the first quarter was a decrease of 6 million year over year.
Ingrid Lunden of TechCrunch.com reported that Twitter has been focusing on making conversations easier to follow:
With those numbers relatively stabilised, Twitter is putting more focus on trying to improve its actual product in the two areas where it has been considered weak: the ability for people to use Twitter when it gets noisy and active; and the general “health” of content management, around harassment and fake news.
For the former, it’s been tinkering with a prototype app called twttr, and for the latter, it’s been adding more rules that it is proactively enforcing, which it says has led to “helping [Twitter] remove 2.5 times more of this content since launch.”
The “initial focus” of the twttr app up to now has been to focus on conversations and how to make them easier to follow. This implies that the app could stay around for some time to come and become the testing ground for much more, including Twitter’s increasing forays into video and other content and how it manages bad actors on the platform: in other words, aspects of the service potentially represent opportunities for growth and monetization — or otherwise urgently need attention because if they don’t get resolved they will ultimately hinder both.