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Twitter earnings: User growth could save Dorsey’s job

Twitter​ logo
  • Q1 revenue: $808 million (+3% YoY, -20% QoQ, vs. $776 million expected)
  • Q1 earnings: $8.4 million loss (compared to earnings of $190.8 million in 2019 Q1, earnings of $119 million last quarter)
  • Q2 guidance: Twitter didn't offer guidance on the second quarter, due to uncertainty related to COVID-19.

The big number: Twitter reported an average of 166 million monetizable daily active users over the quarter, a record 24% growth from the same period last year. This increase in user engagement tracks alongside the growth that social media platforms have seen broadly during the first quarter.

People are talking: "We had a strong start to the quarter, that was impacted by widespread economic disruption related to COVID-19 in March, leading to a significant decrease in global advertising spend," Ned Segal, Twitter's CFO, said on Thursday's earnings call.

Opportunities: CEO Jack Dorsey said the company plans to focus on its revenue-generating products, particularly Mobile App Promotion, a series of tools that allow advertisers to promote mobile apps on Twitter. "We've now made this our number one priority," Dorsey said on the call.

Twitter is also focused on making timelines more relevant for users by letting them easily follow topics and custom lists of accounts. The goal, Dorsey said, is to make Twitter more accessible to people in ways that also inform Twitter's paid ad offerings. "In the past, people have had to find and follow all the accounts related to a particular topic or an interest. We should be doing that work for them," Dorsey said, referring to these new tools.

Threats: Like every ad-reliant business, Twitter is feeling the pinch from COVID-19 and the steep decline in advertising spending during the first quarter of 2020. Earnings took a nosedive in the quarter, dropping more than 100% over the same period the last year, although analysts didn't seem particularly worried — no one brought it up on the call. "We're continuing to grow our engineering product design research and trust and safety teams, while largely holding headcount at current levels in other functions," Segal said.

The power struggle: Earlier this year, Twitter struck a deal with activist investor Elliott Management, which had been calling for Dorsey's resignation: The company pledged to grow its user base by 20% this year. That's forcing Twitter to consider ways to expand beyond its base of power users. Twitter has always been a platform for public conversations. Now, it's beginning to borrow from other social platforms with products that allow users to speak to smaller audiences.

On Thursday's earnings call, Dorsey pointed to Fleets as an example of this. The new product, which Twitter is still rolling out, essentially mimics the Stories features on Facebook, Instagram and Snapchat. "This is an opportunity for people to share something that disappears in 24 hours. There's no likes, there's no retweets. There's no replies," Dorsey said. "The reason we built this is because it helps people who don't necessarily have something to say to the world, but do have something to say to a group of friends or followers and don't necessarily want that content, that Tweet, to be around forever."

App store laws, Microsoft AR and Square buys Tidal

Welcome to this weekend's Source Code podcast.

Cole Burston/Bloomberg

This week on the Source Code podcast: First, an update on Google's user-tracking change. Then, Ben Pimentel joins the show to discuss Square buying Tidal, and what it means for the fintech and music worlds. Later, Emily Birnbaum explains the bill moving through the Arizona legislature that has Google and Apple worried about the future of app stores. And finally, Janko Roettgers discusses Microsoft Mesh, the state of AR and VR headsets, and when we're all going to be doing meetings as holograms.

For more on the topics in this episode:

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Sponsored Content

The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

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Saul Hudson
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.

Twitter’s future is newsletters and podcasts, not tweets

With Revue and a slew of other new products, Twitter is trying hard to move past texting.

We started with 140 characters. What now?

Image: Liv Iko/Protocol

Twitter was once a home for 140-character missives about your lunch. Now, it's something like the real-time nerve center of the internet. But as for what Twitter wants to be going forward? It's slightly more complicated.

In just the last few months, Twitter has rolled out Fleets, a Stories-like feature; started testing an audio-only experience called Spaces; and acquired the podcast app Breaker and the video chat app Squad. And on Tuesday, Twitter announced it was acquiring Revue, a newsletter platform. The whole 140-characters thing (which is now 280 characters, by the way) is certainly not Twitter's organizing principle anymore. So what is?

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Doxxing insurrectionists: Capitol riot divides online extremism researchers

The uprising has sparked a tense debate about the right way to stitch together the digital scraps of someone's life to publicly accuse them of committing a crime.

Rioters scale the U.S. Capitol walls during the insurrection.

Photo: Blink O'faneye/Flickr

Joan Donovan has a panic button in her office, just in case one of the online extremists she spends her days fighting tries to fight back.

"This is not baby shit," Donovan, who is research director of Harvard's Shorenstein Center on Media, Politics and Public Policy, said. "You do not fuck around with these people in public."

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Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
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