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Twitter Says User Numbers Are Up Amid COVID-19 Lockdowns, But Warns of Revenue Impacts



As you might expect, Twitter is seeing a lot more usage amid the COVID-19 lockdowns across the world – but that doesn’t, however, mean that Twitter’s making more money as a result, according to a new update from the company.

As reported by Bloomberg, Twitter has this week withdrawn its revenue and operating income guidance for the first quarter of 2020, as well as its outlook for expenses, headcount, and capital expenditures for the full year due to the rising impact of COVID-19.

As per Twitter:

“While the near-term financial impact of this pandemic is rapidly evolving and difficult to measure, based on current visibility, the company expects Q1 revenue to be down slightly on a year-over-year basis. Twitter also expects to incur a GAAP operating loss, as reduced expenses resulting from COVID-19 disruption are unlikely to fully offset the revenue impact of the pandemic in Q1.”

Those reduced expenses likely relate to the reduction in human moderators who have been sent home to help limit the spread of COVID-19. In their place, Twitter will increasingly rely on automation tools for reviews and approvals for the time being – but within that, it seems likely that Twitter will also see reduced costs, overall, depending on any potential compensation package in place for those workers.

So overall, Twitter is predicting broader revenue impacts – yet, at the same time, Twitter usage is rising.

Further into its update, Twitter says that its monetizable DAU (mDAU) count is up to 164 million for the quarter, a 23% increase Q1 2019 (and up 8% from its most recent performance update).

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So, theoretically, Twitter should be able to display more ads right now, not less, right?


The platform didn’t provide a detailed breakdown of the impacts here, other than noting that:

“Twitter had a strong start to the year before the effects of COVID-19 began spreading more broadly, including a successful Super Bowl and overall strength in the US. The COVID-19 impact began in Asia, and as it unfolded into a global pandemic, it has impacted Twitter’s advertising revenue globally more significantly in the last few weeks.”

The impact is likely coming from smaller advertisers and businesses that have either been shut down or restricted, and which are now switching their focus onto how they can simply stay in operation, as opposed to spending on ads. The rolling closures will also mean a significant reduction in ad spend from restaurants, cinemas, events, etc. While Twitter is seeing more usage, it makes sense that it would also be seeing less ad demand, at least in this initial stage of the lockdown period.

That may change as people get more accustomed to this changed environment, but Twitter is moving early to advise of the potential impacts. That could also have something to do with the fact that CEO Jack Dorsey was effectively saved from an effort to oust him by activist investor group Elliott Management Corp. earlier this month, after Dorsey and Co. made a deal to keep him in the job, contingent on strict performance improvements.

Among those measures, Dorsey needs to increase usage and “accelerate revenue growth on a year-over-year basis”, or he’ll once again face removal from the top job. Given the situation, the parameters of that deal will likely need to change, but by posting an update on the potential revenue impacts, Dorsey may also be getting ahead of any such action, giving himself more time.

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It’ll be interesting to see how digital advertising trends shift amid the COVID-19 lockdowns as the weeks and months go on. More people will spending more time online, and more businesses will subsequently be looking to re-allocate their ad budgets to reach them, which will likely see increased opportunities for all digital platforms. But you do have to balance that against the potential impacts of closed businesses also being absent from the ad market.

The full impacts are difficult to measure at this stage, but as the shutdowns and restrictions drag on, we’re likely to see significant shifts in the digital advertising landscape.



Jack Dorsey Exits Twitter Board, Clearing the Way for the Elon Musk Era at the App



Elon Musk Launches Hostile Takeover Bid for Twitter

While there’s no new news on the Elon Musk takeover saga, we do have another reminder that Twitter’s leadership team is never going to be the same, regardless of what comes next, with co-founder and former CEO Jack Dorsey today leaving the Twitter board, effective immediately.

Dorsey’s full exit removes another big chunk of experience from the company – over the past two weeks, Twitter has lost:

  • Consumer product leader Kayvon Beykpour, who’d worked at Twitter for four years
  • Head of revenue product Bruce Falck (5 years)
  • Ilya Brown, a VP of product management (6 years)
  • Katrina Lane, VP of Twitter Service (1 year)
  • Max Schmeiser, head of data science (2 years)

That said, Dorsey’s move, isn’t a surprise.

Back in November, when Dorsey announced that he was standing down as Twitter CEO, he also noted that he would stay on Twitter’s board till around ‘May-ish’ to help incoming CEO Parag Agrawal and incoming Twitter Board chair Bret Taylor with their respective transitions.

Of course, back then, Dorsey couldn’t have predicted the chaos on the horizon, but despite the distractions of an imminent takeover, Dorsey has decided to stick with his original plan, and step away from the platform that he helped build.

That clears the path for a new era under Elon Musk, who has vowed to make significant changes to the way that Twitter operates – though of late, Musk seems to be more distracted by stats on population decline and political conspiracies than he does in completing the Twitter deal.

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On May 13th, Musk said that his Twitter takeover offer was effectively ‘on hold’ pending more data from Twitter on its fake profile count, which it pegs at 5% of active users. Many users have since shared partial evidence that, in their opinion, proves that this number is not correct, while Twitter itself has maintained that there’s no such thing as ‘on hold’ in the takeover process, and that it’s preparing for the deal to close sometime soon.

Musk says that he won’t pay full price for something that’s not what he believed he was purchasing.


But then again, Musk also waived doing detailed due diligence on Twitter’s business, in order to reach an agreement faster, which means that he may be tied to the purchase anyway, regardless of what Twitter or anyone else may find here.

For his part, Dorsey has been a strong advocate for Musk, and his interest in Twitter, and has noted several times that he believes Musk is the best option to ‘save’ the company.

Now Dorsey is getting out of the way to let that happen, which will mean that none of Twitter’s four founders remain in any position to advise or guide the platform in any direct capacity from now on.

That could be a good thing. Twitter, of course, is a far cry from what it was in the beginning, and maybe now it needs to detach from its founding concepts to reach its next stage.

But again, that’s a lot of experience heading out the door, with current CEO Agrawal also on the chopping block, according to Musk’s statements.

How that impacts Twitter’s future direction is hard to say. Again, Musk has already flagged significant changes, but without experienced voices advising him on what’s happened in the past, he could be doomed to repeat previous mistakes, impeding the company’s progress even more.

Or maybe it makes things easier, without the constraints of past limitations holding things up. I would lean towards the former, but clearly, Musk has his own ideas about how he’s going to transform the app, once he does, eventually, take control.


Which seems like more of a ‘when’ than ‘if’, but maybe Musk has some other trick up his sleeve to either reduce his offer price or get out of the Twitter deal entirely.

Either way, massive changes are coming to the app, which could alter the way that it’s used entirely.

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