Many people have attributed the departure of twitter CEO Dick Costolo to a slump in the number of new users as well as low digital advertising revenue, despite insistence from Costolo and interim CEO (and original founder) Jack Dorsey.
TWTR stock rose by 8% for a short time after the announcement that Costolo would be leaving his position as CEO after five years. That number is seen as an indicator of the uneasy feelings that investors had about who led the company through its public offering.
Twitter has fewer active users per month than the giant of social media, Facebook. Twitter has 302 million active users compared to Facebook’s 1.44bn. While Twitter is different to Facebook and always likely to be more niche, the worrying news is that growth in user numbers fell by almost a third from 2013 to 2015, and is projected to be as low as 6% by 2017.
Current active user numbers and future projections have implications for advertising revenue and investors are probably looking at them closely. Twitter accounts for 1.6% of the vital $50.73 billion rand worth US digital advertising market compared with Facebook’s imposing 7.6%. Facebook’s also leads US mobile internet ads at 18.5% compared to Twitter’s meagre 3.6%. The trend is carries on into mobile display ads where Twitter has a 7% market share and Facebook 36.7%, according to eMarketer.
It is worth remembering that this is a comparison of two giants and that most social networks would give anything to be half as successful as twitter. Twitter is not any other social network though and has to come up to great expectations and this may be the reason why Costolo had to make way for a new leader.
