
Twitter shares drop after reporting declining monthly active users - okket
https://www.cnbc.com/2018/07/27/twitter-earnings-q2-2018.html
======
krisroadruck
I think they lost the initiative the moment they decided to focus on
censorship instead of combating spam/bots. Other things that didn't help
include killing third-party clients a few years back, and screwing with the
chronological timeline. Twitter was frickin amazing from like 2009-maybe
2013ish (though the whole TweetDeck aquisition in 2011 was a serious blow) and
has been in steady decline ever since from a quality and usefulness
perspective.

~~~
pjc50
> focus on censorship instead of combating spam/bots

There isn't really a distinction between these two.

The crackdown on abuse was absolutely necessary, although it doesn't really go
far enough, because the platform was getting a name for driving off high-
profile users.

~~~
krisroadruck
Er yes, there is a distinction between the two.

Scenario One: I, a real, active user that discusses a variety of topics, says
something someone doesn't like and twitter decides to ban/shadow ban me.*

Scenario Two: I set up a network of fake accounts to automatically tweet, dm
or @mention people pushing the same thing over and over to thousands of users.

Twitter has a block/ignore function. That is all that is needed to deal with
scenario one in the vast majority of cases. When companies start introducing
their politics and speech preferences into a global communications platform in
the form of censorship and banning, the utility of that platform drops
immediately. Consider if anyone ever said something in an email or sms that
someone else disagreed with, we took away their ability to use email or sms. I
know it's not apples to apples since those are primarily one-to-one platforms
but you can see what I mean.

Meanwhile, combating scenario two almost always has a positive effect, but
apparently is too hard of a problem for Twitter and its $2b/year budget to
tackle as evidenced by the complete and utter lack of progress on that front
since, from what I can tell, the platforms humble beginning in 2006.

*Note this is a hypothetical, my account is and has been in good standing since I signed up but I've seen many accounts go away or be silenced in this fashion.

Edit: Had wrong date for twitters inception. Fixed.

~~~
pjc50
> Consider if anyone ever said something in an email or sms that someone else
> disagreed with, we took away their ability to use email or sms.

Harassing people through SMS is a criminal offence in the UK and a number of
other countries.

~~~
krisroadruck
To be clear, I wasn't defending peoples "rights" to harass others. I was
talking about topic censorship. If you use the platform to harass people then
yeah, you should probably be cordoned off at a minimum.

------
Waterluvian
What is the endgame for companies like Twitter and Facebook? It seems like the
only behaviour for publicly traded tech companies is grow or die. So what
happens when they hit some theoretical maximum? Is it not acceptable that
they're making money? Is there no steady state? Not saying that Twitter is
there. But theoretically what does that look like?

"Hey, so we basically maxed out our target market share. We're healthy,
profitable, popular, but this is basically the limit. There aren't any more
people in our demo left on the planet to capture."

"Nope. Go make more money. Sell more ad space. Or shift focus to a new product
or something."

"But that will either degrade the quality of our product or take our eye off
the ball and allow a competitor to eat our lunch."

"Too bad. I don't care how profitable you are, only that you're more
profitable than last year."

~~~
andrestan
There are plenty of public companies that reach a steady state. What happens
for those companies is their PE ratios shrink, they start paying out dividends
and their expectation is to be a big lumbering giant whose valuation isn't
expected to have dramatic swings based on outsized expected future earnings.
What happened here is not "Wall Street" saying that Twitter must die, it's
saying "Hey, your newly expected future earnings are no longer able to justify
your prior valuation and therefore here's your new valuation based on all
currently available information".

~~~
Waterluvian
Okay so twitter has been in a "valued based on anticipated growth" state. And
other companies can matriculate to a "valued based on reliable dividends"
state? This I can understand. Thanks.

~~~
repolfx
Yes. Bear in mind tech companies are terrible at paying dividends. Google has
never paid one, Apple only really started after Jobs' death. No dividends
means no reason to hold a stock unless you think the value will go up
significantly (and ultimately the value is driven by an expectation that one
day divis will be issued).

Facebook and Twitter are getting hammered because it's clear they're spending
insane quantities of cash on attempting to "cleanse" their platforms of
undesirables. Facebook alone announced they were going to hire tens of
thousands more people to work on "security" (lol). That bloated spend reduces
future dividend potential and causes their stock to be less valuable.

------
gnicholas
Don't forget the part where they now show you tweets that people you follow
have liked, just the same as if they had retweeted them.

I already unfollowed people who tweet/retweet too much for my liking, and now
I have to unfollow people who 'like' things prolifically also? Ridiculous.

~~~
vmarsy
> Don't forget the part where they now show you tweets that people you follow
> have liked, just the same as if they had retweeted them.

I rarely use twitter but the first time I saw these "person X liked this" I
just looked up how to not get that. Turns out it's pretty simple, you just
click on that tweet menu and select "I don't like this tweet", repeat for
maybe one or two other tweets on your timeline, and then refresh your feed and
they're all gone. People mentioned it can come back after a couple months,
you'd notice quickly as your feed quality would suck, you just redo the same.

The only one I see now are "person X and Y liked Z tweet" but in that case I
follow X, Y, and Z, so it's usually relevant.

~~~
nasredin
>>People mentioned it can come back after a couple months, you'd notice
quickly as your feed quality would suck, you just redo the same.

Don't you feel like a rat in an experiment?

What's the point of this if you don't even own the controls to the software?

Rhetorical questions.

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foobarbazetc
Guys... I hate to break this to you but their MAU were always juiced due to
rampant bot activity.

They said they were culling bot nets and this is the result.

A lot more culling to go, though.

------
ballenf
Twitter has some misguided PR priorities. So many news stories include tweets
from extreme perspectives that have gotten thousands of
likes/retweets/whatever. Since Twitter really works on their API for this,
it's clear they think it's a good thing.

This is their biggest source of free advertising and it always presents
Twitter as a fringe-fest or, worse, knee-jerk mob mentality and nothing more.

They really need to re-think promoting a system that gives the outside world a
view of only the most extreme and unflattering view. No matter your political
views, someone you respect will have negative Tweets presented in the news. It
really makes it feel like it's only a platform for someone else.

------
ISL
To me, the real TWTR story isn't the 14% drop this week, but that TWTR's price
is up 100% from the level it held through all of 2016, a time which included
takeover talks.

~~~
stuckinarut
Trump effect.

------
perseusprime11
Twitter is not showing not much growth in MAUs. Valuation is still high.
Market cap is based on future cash flows. No future cash flows (MAUs) means
market cap has to come down. Just showing profit is not enough. It just shows
you can control expenses but does not deserve the huge market cap. This is a
$1billion company posing as a $30B company. Anybody disagree?

~~~
snowwrestler
I propose that MAU growth is a dumb metric for a company that is 10 years old.
Companies exist to make money, not attract eyeballs. Plenty of companies make
good money without reaching every person in the world, or even a sizable
percentage of them.

~~~
jiveturkey
Twitter is the type of company that only works due to network effect. Like
ebay and facebook. So I'd say the age of the company is immaterial, it's how
much of the market they've acquired so far. MAU growth is a fair metric.

~~~
snowwrestler
Some networks are more valuable than others. Raw MAU tells you nothing about
the LTV of those AUs. What's better for eBay: a shitload of people who never
buy anything? Or a smaller network of engaged, repeat sellers and buyers?

And some networks have negative value. 4chan, despite attracting large traffic
numbers and being a well-known cultural force on the Internet, has always
struggled to attract advertisers.

To maximize financial value of its user network, a parent company must exclude
users and content that subtract value. Examples would be lower-LTV users who
drive away higher-LTV users via harassment. Or users who post content so
objectionable that brands don't want to advertise against it. MAU growth alone
tells you nothing about those things.

------
ilamparithi
They recently started logging out users and asking for mobile number. I didn't
want to give my mobile number so I uninstalled the app. Occasionally visit the
website and view some users' tweets (without logging in). But as it was
mentioned elsewhere it's full of dark patterns and an irritating experience.

~~~
0x00000000
Can you delete your account if you wanted to without providing a phone number?
On Instagram you can't once it starts asking you.

~~~
ilamparithi
I don't think so since we are already logged out.

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swanson
I think it was straightforward to predict that monthly active users would be
down after they banned the bots (and lots of accounts were tweeting about
losing 4-7 figures worth of followers) -- I'm a bit surprised that this is
being cited as the reason for the bloodbath. Surely this point is not a
sophisticated analysis or am I way over-estimating owners of tech stocks that
live and die on earnings calls?

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_pmf_
What I don't understand is the discrepancy between the size of their
engineering workforce and the lousy quality of their web client on mobile.

~~~
Liquix
This may be an intentional dark pattern / effort to drive users away from the
web client and to the official app. Facebook and reddit do the same thing.
More permissions = more juicy data to harvest.

~~~
stefan_
Ding ding ding. The web page is so comically broken it can only be
intentional. No user pages even load for me unless I do an explicit reload;
the first time around, the spinner just spins endlessly.

~~~
pjc50
Another fun one is that a _single_ page load can give you a "rate limit
exceeded" failure.

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sschueller
Is the bubble finally bursting?

~~~
danso
I think more time will tell. Facebook and Twitter are both still higher than
where they were in March of this year. Same for Alphabet, Amazon, Netflix,
Apple, and Microsoft.

~~~
dominotw
amd, amzn, team had a good run yesterday. Seems like mixed bag. 12% fall for
twtr considering it had more than 100% rise this year.

~~~
bdcravens
> 12% fall for twtr considering it had more than 100% rise this year

Of course, that number's currently at 19%; may end up day over 20

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magwa101
Ahh, the big SV vanity metric comes home to roost.

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milankragujevic
Well, they recently banned me for being under 13 when I opened my account in
2010, so I guess serves them right :P

~~~
stuckinarut
That's actually a liability thing though, I think (COPPA?)

~~~
milankragujevic
But how do I fix the past? I can't undo it, but I want to keep my account...
:/

------
djhworld
I like twitter, I don't really tweet that much though, don't really have that
much to say.

I follow a lot of people, but I'd imagine if I looked at the stats, probably
only the top 25% of those tweet regularly and the rest probably just get lost
in the ether, or just don't tweet at all

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inverse_pi
The surprising thing to note here is how much optimism the street has in
$twtr. Just one quarter of small beat and the stock jumped 100%. After the
drop today (to $34) it's still too high for $twtr which hasn't actually proved
anything since the stock was high teens low 20s. If anything, their live
streaming effort is pretty much down the drain, and Anthony Noto, who's pretty
much the heart and soul of Twitter operation, left. I'm super surprised the
stock is still mid 30s.

~~~
ISL
The Tweeter-in-Chief has provided more free marketing than money could buy.
Twitter is now an indelible brand on decadal timescales.

They might go the way of MySpace someday, but, at present, there's nothing in
the West quite like Twitter.

------
Wissmania
Honestly pretty pathetic that investors hadn't priced in the existence of bots
into their valuation of the company. Perhaps I expect too much.

------
argo_
Any ideas about where the users (twitter/facebook) are going to? What these
users that are not on twitter anymore are doing instead?

~~~
krageon
You are assuming it needs to be replaced at all. These services are vapid
additions to your life and once they are gone I think people will realize they
didn't need to exist in the first place.

~~~
delecti
You're seriously generalizing. I only met my wife because of services like
this; we met on Instagram and got to know each other over Twitter. I have
other friends I similarly met and keep in contact with mainly over Twitter.
I'm very glad the services exist.

There are alcoholics who have dozens of drinks a week and there are people who
responsibly augment a night of socializing with a drink or two. Alcohol isn't
fundamentally irredeemable because some people develop problems, and neither
is social media.

~~~
beaconstudios
but alcohol is not backed by a company containing thousands of engineers whose
job is to make it more addictive.

~~~
travem
Are you being sarcastic (serious question). Alcohol itself is chemically
addictive and there are likely orders or magnitudes more people in the alcohol
industry trying to make their alcoholic beverages more attractive (and thus
spreading addictive substances further into the population) to consumers. It's
an industry that easily tops over 1,000 Billion dollars globally.

~~~
beaconstudios
read my reply to the other comment.

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red_hare
Hopefully this will encourage them to finally deal with their handle-squatting
issue.

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acd
Copy paste to Facebook if you use google trends on social networks.

Ask your self this will the world be a better or worse place without Twitter?

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ashray5
Tremendous pessimism on this thread. It's time for an intelligent investor to
buy.

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a2tech
Twitter has been all smoke and mirrors since day one. Their platform was never
going to really make money.

~~~
imjk
They made $265MM dollars last quarter, up from $178MM same time last year.
That’s on $711MM of revenue.

~~~
sigstoat
have they produced more profit than all their previous losses, yet?

i don't think a2tech is wrong until that has happened.

~~~
SmellyGeekBoy
Is this how companies are typically valued?

~~~
mi100hael
Not exactly, but if those previous losses were financed by investors, then it
could point to difficulty for investors to get a return in the future.

------
sandworm101
Trump, but not in the way you might think. Facebook instantly becomes uncool
once your grandparents join and try to friend you. Southpark knew this years
ago. Now the iconic angry grandparent is on twitter. Not only are kids leaving
as their grandparents sign up to follow Trump, everyone sees king grandpa in
Trump. It isn't about politics or anger. Twitter is just falling off the
uncool grandparent cliff.

~~~
fullshark
Twitter would probably doing a lot worse if HRC won:

[https://www.bloomberg.com/news/articles/2017-08-17/what-
is-t...](https://www.bloomberg.com/news/articles/2017-08-17/what-is-trump-
worth-to-twitter-one-analyst-estimates-2-billion)

I think when we imagined the internet the idea that the president could
communicate with us instantly from anywhere in the world was one of the ideal
use cases for it. Who could have guessed the reality of it though!

~~~
josefresco
Trump would not have disappeared if Hillary had won. He would have lead the
charge to take her down. Prior to the election he had already amassed a very
large follower count.

