Twitter sales went up but might take a bad turn

Twitter sales went up by 3%, but is expected is sharply dip this April quarter

Twitter’s overall performance during the first quarter of 2020 was a two-part story because of the Coronavirus pandemic. The report of the company was positive until the declaration of the pandemic set in.

Companies are reporting their overall performance during the first quarter of the year. Some industries are thriving while some are floundering. Some are even on the brink of bankruptcy.

Majority of the those that are finding the silver lining amid this pandemic belong to the online tech industry. Their businesses are not reliant on physical stores opening or actual foot traffic in commercial areas unlike retail-based businesses.

Google just posted positive returns during the January quarter, but they themselves are preparing for tougher times ahead this 2020. A handful of companies also did positively during the first two months of the first quarter, but majority of these metrics were wiped by March.

Twitter’s story is the same as Google’s

Twitter reported that they just reached a huge milestone in their key metrics. According to their report, Twitter’s average daily users experienced a spike of up to 24% or 166 million users. The growth is their highest record for the metric.

Unfortunately, the growth didn’t translate directly to their bottom lines. Similar to Google, Twitter’s usage went up, but the advertisers spent less. Twitter users accessed the platform for information and education, but not for commercial purposes.

As such, Twitter posted a net margin of negative one percent during this period. The company actually foresaw this earlier in March when it removed the financial guidelines it shared with investors.

The split of the story is the first period of January to late February and early March to its end. During the first part, Twitter’s projections were all on point for a strong start, but it all came crashing down when the pandemic became a global issue.

Twitter’s future with Jack Dorsey

Activist investors have been on the neck of Twitter for an immediate leadership change, and Twitter CEO, Jack Dorsey is in the crosshair. The investors are lobbying for better leadership that can deliver more rapid growth with bigger profits.

Should Dorsey continue to falter as the leader of the pack, the investors will have to see heads roll. In fact, they have already successfully taken away some powers from Dorsey in the board.

Nevertheless, the company is actively pursuing more aggressive advertising initiatives to drive more downloads of the app. The company has since shifted resources and priorities to increase focus on revenue products.

They started particularly with performance ads beginning with MAP [mobile application promotion ads] with the goal of accelerating their long-term road map.

Image courtesy of Yucel Moran/ Unsplash

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