Twitter to reduce staff, shutter Vine
While advertising grew 6 percent to $545M, losses continue, and the company may be looking to do what Steve Jobs did at Apple, focus on core services, discarding the rest
The earnings woes of Twitter continue as the company reported a net loss of $103 million, and said it would cut its workforce by about 9 percent. The big news, of course, was that there was no news about the company’s hopes to sell itself to someone, anyone, will to take on the task of creating a viable business plan for the social media outlet.
Advertising revenue at Twitter totaled $545 million, an increase of 6 percent year-over-year, with mobile advertising revenue now 90 percent of total ad revenue.
“Our strategy is directly driving growth in audience and engagement, with an acceleration in year- over-year growth for daily active usage, Tweet impressions, and time spent for the second consecutive quarter,” Twitter’s CEO Jack Dorsey said in the earnings announcement. “We see a significant opportunity to increase growth as we continue to improve the core service. We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth. The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”
My goodness, what to do about Twitter. It remains the number one social media network for journalists, and millions of consumers depend on it for their news today. In other words, despite the jokes some in the media make at the expense of Twitter, most are cheering the company on – or at least crossing their fingers that one day we don’t wake up and it is gone.
So, what’s the answer? It would seem that it would be a nice fit for someone. But not when it loses so much money – and that is why the layoffs are both not a surprise, and probably something to be happy about (though we can all sympathize with those losing their jobs).
Dorsey would not comment on any possible sale on the investor conference call, saying that the “board is committed to maximizing long-term shareholder value. I don’t plan to comment any further on this topic.” (Gannett opened its conference call the same way, saying it would not discuss rumors of possible acquisitions on the call.)
What would Steve Jobs have done with Twitter, assuming he wasn’t also guiding Apple? I expect he would trim it down to its core functions. If Twitter was just a service with support staff and sales people what would it look like? If it would at least not lose millions, it would be of value to a lot of companies. That is probably what Jack Dorsey sees, and where the company is headed.
Shares of Twitter jumped on the news of the staff reductions, but have settled back down to only up fractionally as the markets opened.
Well, as I mentioned above, reducing things down to their core may be the strategy Twitter plans on pursuing. To that end, Twitter announced today that Vine will be shuttered.
The website will be kept online, and users will be able to download their videos, but the app will be discontinued – probably because there will be no one to keep it going.
This feels like an acquisition opportunity for a company, doesn’t it?