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The most popular micro-blogging website Twitter Inc. is struggling to generate revenue since 2013, when it became a public company. This thing is directly affecting the Twitter stock price.

Twitter has 319 million active users as per Wikipedia 2016 which is basically a small number compared to Facebook, Instagram and WhatsApp. Nowadays, Twitter is generally used for sharing information and spreading the news with the help of hashtag mainly.

Twitter wants to become the social media giant and that is the main reason, Twitter has rejected $2 billion offer from Facebook and a $10 billion offer from Google. According to business leaders, rejecting these two offers was the biggest mistakes Twitter has done.

Reasons why Twitter is failing to generate revenue…

  • Failed to innovate

Twitter has become less innovative after going public in 2013. Facebook, Google and Apple were hiring smart and talented people from Twitter that’s why it became less innovative.

Finally in 2017, Twitter doubled the length of tweets to 280 characters. It took almost 10 years to make this change.

  • Failed to grow user base

Twitter active users and revenue

Source : Recode

In the beginning of Twitter, the user base of twitter was increasing rapidly. Besides, the growth was faster than Facebook. But then, it almost stopped.

Also Read : Why Facebook, Google and other tech giants are not allowed in China?

  • Failed to encourage advertisers

The main source of generating revenue for social networking sites such as Facebook and Twitter is ADVERTISEMENTS. Because of less effective service compare to Facebook and Google, Twitter is not getting enough revenue from advertisements.

Less active users is also a big reason for not encouraging advertisers.

  • Offer Rejection

As I have pointed out at the beginning of an article, Twitter rejected a huge offer from Facebook and Google.

  • Less security focus

Hacking of twitter accounts in a large number of users made a bad impression to users. Accounts of celebrities get hacked is not acceptable. Facebook and Instagram are focusing more on security of all users.

  • Failed in acquisition

Twitter acquired Periscope in 2015 as a live streaming tool. But Periscope is struggling against live streaming feature of Facebook and Instagram which is far more better.

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By Anuj Vohra

Hi , I am Anuj Vohra. Founder of & Saral Investment.

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