Tens of millions of new users flocked to Twitter because of the pandemic and the Black Lives Matter protests – but profits took a nosedive as businesses reined in their spending on advertising.
Daily usage on the social media platform jumped by 34 per cent in the three months to the end of June compared with the previous year, the biggest quarterly spike in Twitter’s history.
But the economic impact of the pandemic has also made advertisers more nervous about spending, sending Twitter’s second quarter revenues down from £662m to £537m. That was short of the £552m expected by Wall Street analysts.
The US company reported an overall loss of £940m for the quarter, compared with an £870m profit the previous year. As well as the impact of the virus, it was also hit by an £857m tax charge.
The red ink came as boss Jack Dorsey apologised for an embarrassing incident last week that saw hackers tweet from the accounts of highprofile users including Elon Musk, Barack Obama, Joe Biden, Kim Kardashian and Kayne West.
‘Last week was a really tough week for all of us at Twitter,’ Dorsey, 43, said during a call with analysts. Twitter had 186m daily users in the second quarter, up from about 139m previously.
New tweeters have been flocking to the platform as they self-isolated during the pandemic. The Black Lives Matter protests on both sides of the Atlantic also drew people to Twitter to express their views.
Despite the influx of users, Twitter’s advertising business continued to suffer in the second quarter.
Revenues plunged 27 per cent in the last three weeks of March when the lockdown was imposed. A ‘gradual, moderate recovery’ in April proved to be short-lived as many advertisers put the brakes on spending once again in late May to mid-June.
Jasmine Enberg, an analyst at information provider Emarketer, said Twitter’s ‘strength as a news and entertainment source’ had helped to buoy the network during the pandemic’.
Reference: This is Money: Matt Oliver For The Daily Mail 15 hrs ago