Twitter's first quarter results were released a little earlier than they should have been, revealing some pretty disappointing results for the social network.
While this is not the first time that Twitter has seen disheartening results, the company's investors had been told that new features and management were paying off and that the business was doing well. So what's next for the Twitter CEO and his team?
Many suggest that Twitter's less-than-stellar results are due to the company's relatively ineffective performace as an advertising platform, in comparison with its competitors.
"Do people want to leave what they are doing on Twitter and do something else like buy something?" said Debra Aho Williamson, an analyst from eMarketer. "Direct-response advertisers haven't figured out the best way to use Twitter, and Twitter hasn't figured out the best way to market to them."
The issue of turning users into profit is not the only issue that Twitter is facing. The social media giant is also reportedly not growing as fast as it would like to.
Twitter will need to be creative when it comes to turning its user-base into a profit. It may want to follow the lead of many other social media companies that are starting to turn away from traditional advertising.
Snapchat, for instance, has been working with content companies in order to provide interesting magazine-type ads for users to look at — and even then, it's a challenge to get users to want to look at the ads. Of course Twitter won't be able to do anything too similar, as it runs a completely different platform — but this does serve as a testament to how companies are able to get creative with their advertising methods.
It's important to note that Twitter is not losing money. In fact, it is gaining millions. The problem is that the company told investors that it expected to make a lot more money than what it actually ended up making.
Twitter CEO Dick Costolo is facing a lot of pressure at this point. And it seems as though he doesn't have a whole lot to work with — Twitter is a difficult platform to monetize. Nevertheless, it's still up to Costolo to make it work.
So what's next for Twitter? The company is quickly gaining money every year. While investors might be on Costolo's case, he is clearly doing something right. The leak of financial results was embarrassing — but it wasn't a total disaster for the company. The declining user growth, however, will make this an interesting few years for Twitter.
