Company also teases changes to its users’ safety policies
In the wake of several unsuccessful sales pitches to companies including Salesforce, Apple, Google, and Disney, Twitter is now laying off 9% of its staff, 350 workers, and is rescheduling its earnings, despite posting 8% more revenue this quarter than it had anticipated.
At the same time, Vine announced that it will discontinue the mobile app “in the coming months,” eventually shutting down the service, though vine.co will remain online. The platform, once one of the most popular free video sharing apps in the world, has since been surpassed by Snapchat and Instagram. It has also seen its user base stagnate, and lost most of its senior executives between last year and now.
Despite hopes of changes in Vine’s user patterns and audience reach, the lack of a native advertising platform continued to hurt it. Although Twitter executives continually spoke of the long-term potential of Vine, its unprofitability doomed it. The Q3 earnings report does not even mention Vine, though it does note the live-streaming Periscope app is “making great strides and has become an indispensable tool for sharing live, immersive perspectives around the world.”
Twitter also said earlier this month that it would complete sale negotiations by the time it released its Q3 earning report, but no buyer has been announced. Rumors that SoftBank is now in the running have not been confirmed, and CEO Jack Dorsey declined to offer further comment on the Q3 company earnings call.
While 90% of Twitter revenues come from advertising, growth there has halved. Data sharing sales are one potentially huge growth area left to the company, assuming it can work out the privacy and legal constraints with other companies, governments, and users. The company’s efforts to monetize the huge amount of personal information it collects from users have run into some snags as well lately, such as the Geofeedia imbroglio that has also encompassed Facebook and Instagram.
The company bills the layoffs and other moves as part of a larger internal restructuring as it struggles to address a host of user complaints with respect to bans, doxing, and online trolling and convince investors it is a good buy. Even though Twitter “has beaten earnings expectations” this year and last according to MarketWatch, it has not turned a net profit in some time, and these image problems are not helping it maintain user and revenue growth.
— Shira Ovide (@ShiraOvide) October 27, 2016
Salesforce, for instance, judged the platform’s difficulties in responding to online harassment as a reason for backing away from a deal. (Investors were also unhappy with the proposal.)
Twitter reiterated in the Q3 earnings report, though, that beginning in November, “We will be sharing meaningful updates to our safety policy, our product, and enforcement strategy.”
It is not yet clear exactly what this will entail.
If Twitter does find a buyer next year, it will probably be able to acquire the company for less than the $20-30 billion it sought this year. What that final price would look like will depend both on addressing user experience issues and whether its live-streaming deals with sports leagues will pan out.
Even before this announcement, many of the most popular content creators on the platform were departing for these other services.
The pending demise of Vine evidences the larger consolidation within the free video sharing universe. As The New York Times noted, “Periscope ate Meerkat. Instagram’s new video features might be chewing on Snapchat. And Facebook Live is trying to gobble up everything in sight.”