Twitter (TWTR ) just cant seem to gain the traction that the other social media giants have attained and its most recent earnings announcement proves it. Twitter released their earnings report this week and, as many analysts believed, there has been a slow down in advertiser demand. This slow down has forced twitter to project an even further weakened revenue forecast. This news along with other disappointments from their earnings release sent its share price down almost 14 percent on Wednesday. With such a steep move lower Wednesday the San Francisco-based social media company scrambled to reassure investors it was on the right path, but that path remains very unclear at this point.Twitter tried to prepare investors for the poor earnings on Tuesday when it announced it would lower its revenue guidance to $590 million to $610 million in the third quarter, a significant drop from the $681.4 million analysts had expected. More importantly, Twitter said it had "less overall advertiser demand than expected," as brands decided not to invest in the platform, adding to ongoing concern about how it will continue to make money. Where did all the advertisers go? Well Facebook (FB ) which blew away its earnings announced a severe uptick in online advertising revenues.
An earnings call Tuesday afternoon was led by CEO Jack Dorsey, with CFO Anthony Noto and COO Anthony Bain. All three said they remained confident Twitter can continue to attract new users. Twitter is hoping that their new live video deals will lure in more users, and with them, more advertising dollars.
The company recently announced that it had sealed deals to stream Wimbledon, the Democratic National Convention, and NFL games, and focus on more sports, entertainment, and political events moving forward. An analyst for Morgan Stanley (MS ) said "Even though Twitter's number of monthly active users has stalled, it believes that even people who don't understand Twitter at all will want to come to the site to watch live videos."
Still, Twitter cautioned, again, that it will take time to build the ad tech needed to support the video platform, which makes it hard for it to predict how much money it could eventually earn from video-related advertising. But those changes are coming, Dorsey stressed, and will eventually be lucrative. It should be noted that he used almost these exact same words at the end of the first quarter last year.
Atleast they seem to understand the power, and future of video online, and especially mobile. "We have become a video-centric platform - it's our No.1 ad format in terms of revenue," Dorsey said on the call. "Just a year ago those products did not exist."
