Twitter turns a profit, but social media gets tired

Written by Mark Evans
09/02/2018

Twitter has finally reported its first quarterly profit after a rise in advertising revenue, and video advertising in particular.

The net profit of $91.1m in the fourth quarter of 2017 compares with a loss of $167.1m for the same period a year ago and Twitter expects to be profitable for the full year of 2018.

Whilst cost cutting and a rise in advertising have helped create profit, the underlying user numbers have actually remained flat with 330 million active users a month – a slight rise of 4 per cent year on year, but flat quarter to quarter. The user figures were below analyst’s expectations.

The results come as Facebook users have declined – and the amount of time the average user spends on the site has been reducing – but Snap has seen growth. One can read this several ways, that younger users now consider the first wave of asocial media sites to be ‘old hat’ and move on to something they think their parents won’t use, or as a change in how online communication is used and for what purposes. For example, search in the traditional sense has been replaced by apps, meaning that Google and Bing are facing a challenge too.

The social media giants are well funded and diversifying, so one cannot expect them to fade away any time soon, but in this fastest of moving markets there is no time to stop evolving, as Yahoo knows.