#Twitter crisis? Not if it decides that it can be a smaller, smarter platform

Market hysteria has hit Twitter, with Wall Street and the site's owners agreeing that it should be bigger and more like Facebook. They're both wrong

'Twitter shares drop on faltering user growth," said the headline last week. It turned out that the company had just released its last quarterly return for 2015. It had revenues of $710m (490m) and a net loss of $90m, which means that - compared with the same quarter last year - revenue was up 90% and losses were down by 27%. If you know anything about technology companies, especially those with a global reach, this looks about par for the course: the company is on track to break even and reach eventual profit. Yet the technology babblesphere is full of fevered speculation about whether Twitter "has a future". And the stock market, ever attentive to hysteria, marked the shares down accordingly.

Insofar as all this hullabaloo had any rational basis, it lay in the revelation that Twitter's active user base had declined from 307 million monthly active users to 305 million. Viewed through the distorting prism of Wall Street and the tech commentariat, this is apparently a catastrophe. Why? Because it has stopped growing! "So Twitter user growth (excluding SMS) has now declined," tweeted one excitable commentator. "Brutal."

Continue reading...