After Twitter had its hopes of being saved by suitor Salesforce.com dashed when it was left standing at the altar, the social network known for its 140-character limit has regrouped and is striking out on its own again. Jack Dorsey, a founding member of Twitter and current CEO, is leading the way with a plan to streamline the company and find new ways to relight the public’s imagination.
Good News, Bad News
The news is a mix of good and bad. Twitter’s cutting jobs—350, or about 9 percent of its workforce—in the first round of streamlining.
It’s also going to discontinue some apps it once supported. Vine is on the chopping block, but since few people ultimately used the app designed for six-second videos, it’s probably for the best to put it out of its misery. Dorsey’s return to Twitter last year signaled big changes were in process, but it was hard to know how quickly he could make an impact. This year, there are hard numbers to back that speculation up.
Revenues are up eight percent year over year, to $616 million, but that doesn’t mean Twitter’s making money. The hemorrhage is slowing, though. Beating Wall Street’s estimate of 19 cents a share in losses, Twitter posted just 15 cents per share in losses, ultimately losing only $103 million this quarter. But the most promising sign is a return of the Twitter user base.
It’s no secret that Twitter’s been shrinking for some time, but recent efforts seem to be reversing that trend. Users are up three percent year over year, to 317 million.
Although that doesn’t sound like much, consider how rapidly Twitter was dying, and that the company was looking hard for someone to buy them at almost any price with no takers. A three percent growth in their user base means people are paying attention again, and there are likely opportunities to re-engage existing users as well as create new ones.
Marketing demand is on the rise, too, as Twitter partners with big names like the National Football League, Bloomberg, Buzzfeed and CBS News to provide live broadcasts. Advertising space during these events is selling out fast. Twitter 2.0 may be a slightly different version of the hashtag-sorted social media hangout, but this regrouping gives everyone in Twitterland a chance to recreate Twitter in a more modern package.