Is Twitter a Tech Business Joke?
Although Businessweek recently proclaimed on its cover that Twitter “has finally turned a corner,” a source with “close knowledge” of the company’s financial information has leaked some numbers that tell a very different story.
Twitter has more than 100 million active users worldwide, massive amounts of potentially-valuable celebrity content, with everyone from world leaders to entertainment luminaries like Oprah and Tom Hanks tweeting their thoughts, and a net cash income of about $760 million. But in spite of all it has going for it, the 6-year-old company has not yet found a way to turn a profit.
According to a Gawker.com source, to bring in total revenue of $28.5 million in 2010, Twitter spent and wrote off more than triple that amount, which led to a net loss of $67.8 million. The source also revealed that in 2011, Twitter reported a net loss of $25.8 million on revenue of $23.8 million through April 30. To put that in perspective, through the end of March last year, rival Facebook brought in a whopping 26 times as much revenue, and handily turned almost one third of it into profit.
And sadly, Twitter’s spending has only become more bloated since then. Since mid-2011, the company’s employee headcount has gone from around 450 to almost 900, according to Gawker’s source.
To downplay its miserable financials for Businessweek, Twitter played up its corporate culture. CEO Dick Costolo, who has managed to hang on at Twitter for almost a year and a half (the company previously ran through three CEOs in three years), described some plans for corporate team-building activities and an executive leadership training, but glossed over profit and revenue numbers.
But the real story is that Twitter is in pretty sad shape. However, when Costolo began his tenure as CEO in October 2010, he said, “We’re ready to accomplish more in the next two years than we’ve accomplished in the last four.” He has eight months left to make that happen.
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