Twitter still has a lot to show and prove

Pushing back against trolls and edging forward with a redesign, Twitter hoped to attract new users. Its second-quarter numbers tell a different story.

Brianne Garrett Editorial Intern
Brianne is an editorial intern for CNET from Bay Shore, NY. She is a rising senior at Boston University, studying journalism and Spanish. A lover of food and travel, her passion is storytelling in all its forms.
Brianne Garrett
4 min read

Twitter will release its second-quarter earnings on Thursday, July 27.

Oscar Gutiérrez/CNET

Ed Sheeran has quit Twitter . For real, this time.

The singer, who's been experiencing his fair share of trolling on the platform, said a few weeks back that he was keeping his account and refraining from reading anything except Harry Potter .

But his latest cameo on "Game of Thrones," widely criticized by fans, proved to be the last straw.

"I don't use this anymore," Sheeran wrote on his Twitter, telling fans to follow him on Instagram instead.

Sheeran's not the only person frustrated with Twitter: Celebrities like Kanye West , Emma Stone and Lindsay Lohan have also deleted their accounts

And it's nothing new. Let's not forget how Zelda Williams, daughter of Robin Williams, temporarily deleted the app in 2014 after receiving harsh tweets following her father's suicide, and "Ghostbusters" star Leslie Jones endured a flood of racist messages on the same platform. While it's less visible, regular users experience similar trollish behavior that can make it difficult for anyone to stick around.

It's that culture of negativity that underscores Twitter's problem, and the struggle was apparent once again on Thursday when the company issued its latest earnings report.

In the second quarter of 2017, Twitter's users numbers stayed flat compared with the first quarter of the year at 328 million monthly average users. That was up 5 percent year over year.

Revenue for the second quarter dropped 5 percent from the year-ago quarter to $574 million. The company recorded a net loss of $116 million, for a loss of 16 cents per share.

Twitter's leadership put a positive spin on the quarter.

"We're proud of our strong growth in video, which remained our largest and fastest growing ad format," said Anthony Noto, Twitter's chief operating officer, in a statement. "We remain focused on growing revenue by improving the performance and measurement of our revenue products, tapping into new channels of demand and continuing to grow our data licensing revenue."

But investors weren't happy with the news. In early trading Thursday, Twitter's stock dropped more than 11 percent to around $17.30 per share.

Harassment isn't Twitter's only issue. The company has also vowed to address problems that make the service too insular for new users. If you're not on Twitter now, you probably won't "get it."

Twitter had a chance to shake things up when it offered a redesign in early June, touting it as one that makes the service "lighter, faster, and easier to use," according to Grace Kim, Twitter's vice president of User Research & Design. With this redesign, Twitter claims to be addressing the frustrations and suggestions from current customers and attempting to attract new users who previously stayed away.

Inspirations for this newest update came from CEO Jack Dorsey 's idea to launch #Twitter2017 -- an open call for suggestions to improve the platform. Tackling issues like trolls and strengthening abuse protection were major suggestions by users, yet they remained unaddressed in the update.

As most of Twitter's redesigns have gone, this one is receiving mixed reviews.

The reaction raises the question again: Is Twitter doing enough?

Remember, Twitter performed better than expected in the first quarter, adding 9 million users when many people on Wall Street thought it would lose users. It marked the biggest improvement in two years.

But Michael Pachter, who covers Twitter at Wedbush Securities, heavily attributes Twitter's success in the first quarter to "the Trump effect."

"Users grew primarily because of President Donald Trump's use of Twitter and the notoriety that followed," he said. "We'll see if this is a long-lasting effect."

James Cakmak, an analyst with Monness, Crespi, Hardt & Co., thinks this new user spike will be short-lived. He estimates that new Twitter users may drop to at least half of the 9 million reported three months ago as "political fatigue kicks in."

Twitter, on the other hand, attributes its user growth to a variety of its internal decisions like product improvements including more relevance within timelines and notifications, according to a letter to shareholders.

This includes still betting big on live streaming as Twitter announced in May more than a dozen new sports, music and news programs that makes it resemble more of a media entity than a social network. The company also just launched a new filter (its latest attempt to combat trolling) that lets you mute users who don't follow you or who have a brand-new account.

But it's not just about accommodating active users on the platform -- Twitter also needs to do a better job of welcoming potential new ones.  

Originally published July 26 at 5:00 a.m. PT.
Updated July 27 at 4:55 a.m. PT and 7:41 a.m. PT: Added results from Twitter's second quarter and the drop in Twitter's stock price.

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