Digital Gabe
Cutting Edge Commentary On All Things Media

Twitter Turnaround

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It’s safe to say Twitter has made it through the digital wilderness and has officially turned the company around.  Despite flattish user growth (up 3% YoY) and modest profitability by tech standards (net profit of $61M in Q1), their stock is at a three year high – up 155% from one year ago.  So what’s going on in the nest?

Over the past year Twitter has started to focus more on its core business in an attempt to do Social better than anyone.  They wrote off their disastrous investment in SoundCloud at a $70M loss, and laid off about 10% of their non-mission critical employees over the past two years.  Then they got focused on their ad business by pivoting from a dated display ad platform to a video-first publisher, which helped them command much higher CPMs.

Most importantly of all, Twitter is now attracting long-term investors who aren’t just betting Twitter will get sold.  There’s a belief that they can run a profitable long-term business and have enough unique differentiation from the duopoly (or triopoly for that matter), to stay relevant moving forward.  It’s an impressive turnaround other aspiring digital publishers not named Google, Facebook or Amazon should take note of.

 

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