Twitter celebrated its 10-year anniversary on March 21 with a perfect record of losing money every quarter. The company has rung-up over $2 billion in losses for the decade.
Just as we expected, on February 10 Twitter not only announced another earnings loss of $90 million on $710 million in revenue, but also revealed that its monthly average user total declined by 2 million for the quarter.
Since June, Twitter has plunged from the #3 to the #9 most popular social media site. Wall Street rewarded the company’s performance with a 55 percent stock price decline from about $36 a share to $16 over the last 9 months.
Although Twitter has been a horror story, the company may have some advantages and could redeem itself over time, according to a comparison with social media leader Facebook by Sprout Social.
- 968 million daily active users
- 844 million mobile daily active users
- 1.49 billion monthly active users
- 1.31 billion mobile monthly active users
- 83% of users outside of the US and Canada
- 316 million monthly users
- 80% of active users on mobile
- 77% of users outside the U.S.
- 500 million tweets sent per day
Twitter clearly lacks in the number of overall number of users compared to Facebook.
But 49% of monthly Twitter users follow brands or companies, compared to the average of 16% for Facebook. For some product and service advertisers, their target demographic may actually be spending more time on Twitter.
Facebook’s audience has been sliding away from the younger generation of millennials and toward the older demographic of 50-plus years old as younger users move to the newest trend.
But a majority of Twitter’s user audience is under 40 years old, and likes the speed of Twitter, as well as receiving in “bite sized-pieces” they can quickly consume. Older users tend to prefer the more static nature of Facebook.
In addition, Facebook’s users are balanced between city and rural audiences. But Twitter’s audience is dominated by people who live in cities, and advertisers of city products or services know Twitter gets directly to their target market.
The real problem for Twitter is not just that it only has less than a third of the number of Facebook users. For every one million Twitter followers there were 300 interactions, while for every one million Facebook followers there were 700 interactions, according to Forrester.
The combination of size and engagement interaction means that Facebook has about 8 times the reach that Twitter can provide. The challenge for Twitter on its birthday is that Facebook is profitable and growing, and Twitter is still unprofitable and probably still shrinking.