Twitter falls to loss despite millions joining for coronavirus news
Twitter has said it is losing money as the coronavirus pandemic sees advertisers slash budgets, despite signing up millions of new users in the last few weeks.
The social network said that it was likely to suffer a rare drop in revenue in the first quarter of the year due to “the growing impact of Covid-19” and its “effect on advertiser demand” and that it also expects to make an operating loss during the period.
It follows other tech firms including Apple, Microsoft, Paypal and Booking Holdings, the parent firm of Booking.com, in paring back or entirely withdrawing financial forecasts as the coronavirus pandemic tears into the world economy.
At the same time, Twitter’s active users soared from 152m at the end of December to 164m today, with people across the world flocking to social media to track, interpret and joke about the chaotic and rapidly evolving situation.
Twitter’s chief executive, Jack Dorsey, said: “Twitter’s purpose is to serve the public conversation, and in these trying times our work has never been more critical.
“We’re seeing a meaningful increase in people using Twitter, and our teams are demonstrating incredible resilience adapting to this unprecedented environment.”
The company’s chief financial officer Ned Segal added that it made a “strong start to the year” but that the widening pandemic had bruised advertising income “significantly”. He said that the company remains “confident” in its long-term strategy.
Twitter’s woes are likely to be mirrored by other social media companies and advertising-funded tech companies such as Facebook, Snap, Pinterest and Google, which owns YouTube.
Experts believe that advertising spending is falling across the board, with small businesses – among the strongest customers of social media ads – especially struck as their incomes dry up.
Last week, a report from Deutsche Bank predicted that by June, advertising budgets could fall by as much as 50pc from the same period the previous year.
It focused especially on the travel industry, which it said made up a “low double-digit percentage” of Google’s revenue, quoting one ad buyer as saying: “We can’t even answer all of the phone calls of customers trying to cancel their trips, why on earth would we keep marketing?”