Not even Donald Trump can save Twitter

Can anything convince people to sign on to the social network? So far the answer is no.

Terry Collins Staff Reporter, CNET News
Terry writes about social networking giants and legal issues in Silicon Valley for CNET News. He joined CNET News from the Associated Press, where he spent the six years covering major breaking news in the San Francisco Bay Area. Before the AP, Terry worked at the Star Tribune in Minneapolis and the Kansas City Star. Terry's a native of Chicago.
Terry Collins
3 min read

President Donald Trump should be good news for Twitter.

The billionaire makes headlines almost every day with a tweetstorm of some sort, which should lure new users to Twitter. New users should attract more advertisers, giving Twitter a chance to make a few bucks.

That's not happening, the company said Thursday in an earnings release that showed the number of regular users grew by less than 1 percent despite Trump's prolific and often controversial tweeting, a deal with the NFL to broadcast games and a new push to stream live video.

"Trump is very polarizing and I think a lot of times people might see something he tweeted on the news networks," eMarketer analyst Debra Aho Williamson said in an interview. "They see it there, so they don't need to see it on Twitter."

Enlarge Image

It seems not even Trump's much-discussed tweets can inspire more people to sign up for Twitter.

Getty Images

Those user numbers matter because that's how online advertisers -- looking for the broadest audience -- decide where to put their ad dollars. Advertisers' lack of interest was evident in fourth-quarter revenue of $717 million, compared with Wall Street's expectations of $740 million.

"Not even sure Tom Brady could turn this around," Stifel analyst Scott Devitt said in a note Thursday to investors, adding that he expects "the advertising business will likely decline even more than total revenue."

It could simply be that there's more chaos and controversy than many people have the energy for, despite the power of the brand name.

"They're getting 'top of mind' advertising from [people] just hearing the word 'Twitter' all of the time, but that doesn't seem to be translating to usage or ad dollars," said Betsy Page Sigman, a Georgetown University professor who specializes in social media. "They have so much uncertainty that you don't know what's going to happen in the next few months."

Twitter competes for ad dollars against Facebook, which has more than 1.86 billion monthly users, and Snap, with approximately 301 million monthly users. More important for Snap, most of its users fall into advertisers' most coveted demographic of 18- to 34-year-olds. Snap, which is reportedly valued at between $20 billion and $25 billion, is looking to raise $3 billion in its upcoming IPO. Twitter, by comparison, currently has a market value of $12 billion.

Twitter's shares plunged as much as 18 percent and were down 12.4 percent when the market closed Thursday.

New users may be put off by Twitter's reputation as a home for hate speech and abusive behavior. Twitter CEO Jack Dorsey has said in the past that curbing hate speech is one of his priorities. In one notorious case, comedian Leslie Jones briefly abandoned Twitter last summer after enduring what she called a "personal hell" of sexist and racist abuse.

The company subsequently banned Breitbart editor Milo Yiannopoulos for his ties to that incident. Last month, Twitter suspended the account of pharmaceuticals executive Martin Shkreli following harassment of a female journalist.

On Thursday, Dorsey told analysts the company is also working to make the service easier for people to use.

"It may have felt like we weren't changing much this past year, but...hundreds of little changes added up to more predictable and sustained growth we will now use as a foundation to be more inventive and take bigger risks," he said.

"It will take time to show the results we all want to see," Dorsey said, "and we're moving forward aggressively. It's been hard, it will continue to be hard, and it's all worth it."

Originally published Feb. 9 at 10:39 a.m. PT.
Updated at 12:43 p.m. PT: Adds quote from Georgetown professor.

Updated at 1:12 p.m. PT: Adds closing share price.

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