Why Twitter could be the biggest loser from the Facebook ad boycott

Linda J. Dodson

But the reality is that Twitter remains far less able to withstand a sustained boycott of this kind.

With 330 million active monthly users, Twitter is no minnow but it is far less profitable than Facebook and more narrowly US focused.

At $3.4bn last year, its revenues are less than 5pc of Facebook’s. Historically, the platform has also struggled to deliver consistent revenue growth.

Twitter only recorded its first profit three years ago while Facebook has been in the black for over a decade and posting rising annual revenues ever since.

That leaves Jack Dorsey facing a quandary. Unless he can find a way to escape being lumped in with Facebook as part of the problem, his creation is at risk of serious commercial damage. 

Jack Dorsey does have one advantage however. As a much smaller company, Twitter is arguably more agile too.

Adapt to survive

Reinventing Facebook’s ad-based business model would be like turning around a supertanker. But Dorsey could afford to take the risk by embracing a subscription-driven model.

Sure, Twitter would lose millions of users who were reluctant or unwilling to pay – but it would retain enough to remain a viable business and in the process rid itself of the toxic content that is its biggest problem.

With users paying a small monthly fee, the quality of debate on the platform would improve and investors would prefer the recurring subscription revenue

Dorsey has less to lose too.

At $23bn its market value Twitter is already trailing well below the highs of $35bn it touched in September 2019.

It is worth only about half as much as Dorsey’s other business, Square, a payments company.

A radical change in direction might be just what Twitter needs to break free of the toxic ad-funded orbit of its bigger rival Facebook.

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