Scalper1 News
Struggling social network Twitter ( TWTR ) is being derailed by newer social services including Facebook ( FB )-owned Instagram and privately held Snapchat, according to research group eMarketer, which on Thursday lowered its growth projections for Twitter’s 2016 ad revenue. The growing popularity of chat apps has also “slowed Twitter uptake among younger social network users,” eMarketer said in its report. For 2016, eMarketer expects Twitter to generate $2.61 billion in worldwide ad revenue, down 11% from eMarketer’s earlier prediction of $2.95 billion. Twitter will generate nearly 90% of its revenue – or $2.32 billion worldwide – from mobile this year. That compares with the estimate of $2.62 billion in mobile revenue that eMarketer had forecast in Q3. “Until the company can show that its efforts to restart the growth engine are working, we will stay on the conservative side when it comes to forecasting Twitter usage,” eMarketer principal analyst Debra Aho Williamson told IBD via email. Twitter also has also failed to show “material monetization of logged-out users,” said eMarketer senior forecasting analyst Martín Utreras. “Events like the U.S. election and summer Olympics this year may prove pivotal to the success of this strategy.” Twitter is seen having 291.0 million users worldwide in 2016. Nearly 57 million people in the U.S. – about 30% of social network users, 21% of Internet users and 17.5% of the nation’s population—will use Twitter at least once a month in 2016, eMarketer said. Twitter’s U.S. user base is forecast to expand 8.0% this year, slightly slower growth compared with Pinterest and Tumblr. But Twitter will maintain significantly higher yearly growth rates through 2018 compared to social network leader Facebook and the broader social networking audience, the report said. Twitter is forecast to rank No. 8 by percentage of net digital advertising share held worldwide, with a 1.4% share, eMarketer said. Alphabet ( GOOGL )-owned Google is expected to rank No. 1, with nearly a 30% share. No. 2 Facebook is expected to hold a 12% share of net digital advertising share in 2016, the report said, while No. 3 Baidu ( BIDU ) will hold a 6.1% share and No. 4 Alibaba Group ( BABA ) will hold a 5.9% share. The continued slowdown in Twitter usage came despite a series of new features it rolled out last year, including video tool Periscope and Moments. Twitter reported that user growth slowed for the fourth consecutive quarter in Q4 as it guided Q1 revenue below consensus estimates, raising concerns that usage may be peaking, prompting buyout rumors. The average monthly active user base rose 9% year over year in Q4 to 320 million. Wall Street had expected Twitter to report a 12% rise in users to 323 million. Growth has cooled from 18% in Q1, to 15% in Q2 and 11% in Q3. Twitter, which doesn’t get a high IBD Composite Rating currently, was up more than 2% in afternoon trading in the stock market today , near 17. Image provided by Shutterstock . Scalper1 News
Scalper1 News