Silicon Valley’s ugly duckling starts to blossom

Despite being one of the first social media networks to disrupt the way we communicate, Twitter has never really gleamed the rewards of the connected economy, but perhaps this is changing.

In February, Twitter posted its first ever quarterly profit, and the latest financial report perhaps indicate this was not a fluke. The numbers are certainly heading the right direction, and Twitter could prove to be a platform which collects the digital bounties.

“Our second quarter results reflect the work we’re doing to ensure more people get value from Twitter every day,” said CEO Jack Dorsey. “We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviours that distort and distract from the public conversation.

“We’re also continuing to make it easier for people to find and follow breaking news and events, and have introduced machine learning algorithms that organize the conversation around events, beginning with the World Cup. These efforts contributed to healthy year-over-year daily active usage growth of 11% and demonstrate why we’re investing in the long-term health of Twitter.”

Looking specifically at the numbers, daily active users increased 11% year-on-year, while monthly active users increased to 335 million users. Total revenues across the period grew 24% to $771 million, while the business continued to remain profitable with net income of $100 million. The US accounted for $367 million, a 10% year-on-year increase, though the international markets grew a very impressive 44% to $344 million. Asia was the big growth driver here, with Japan being the most successful, remaining the second largest territory in the Twitter footprint.

As we pointed out earlier in the year, Twitter just seems to be getting better at working with advertisers. Back in February, the team introduced a number of new features, including a new Promoted Tweet composer and a subscription advertising service for small businesses, which essentially made it easier for advertisers to use the platform as a means to engage potential customers.

Over the last three months, some of the more success features included Video Website Cards, Video App Cards, In-Stream Video Ads, and Website Click Cards, as video ad revenue accounted for more than half of the total. These initiatives seem to have had a continued positive impact, as ad engagements increased 81% year-over-year and cost per engagement decreased 32% year-over-year.

Of course, helping advertisers is only half the story, as the platform has to remain engaging. It does help that some of the worlds more controversial (and terrifying) figures are using the platform as a primary means to communicate with the planet, but the team are also introducing more partnerships. With deals with ESPN, Viacom and NBCUniversal, the platform becomes more engaging, while the negative side of Twitter is being successfully addressed.

During the quarter, the team introduced new measures to handle spam, malicious automation, and platform manipulation. As of May 2018, systems identified and challenged more than 9 million potentially spammy or automated accounts per week, up from 6.4 million in December 2017. With the introduction of machine learning and automation processes, twice the number of accounts are being removed for violating spam conditions. The number of spam complaints from users has dropped from an average of approximately 25k per day in March, to approximately 17k per day in May.

Twitter seem to be doing what everyone sort of expected in the first place; delivering a platform which people like and a means for advertisers to communicate with them. It might have taken a few years to get there, but it seems Twitter is finally putting the ugly duckling image behind it.