Twitter doesn’t work as a business, and thinks video will save it (but it’s on the clock)

Every quarter, we expect big things from big companies. To our minds, each three-month cycle needs to be a big win capitalized by a those companies raking in a ton of cash. Twitter didn’t do that today.

And it hasn’t for some time. Really, for the better part of its decade-long existence, Twitter has been — more or less — what you see today.

Sure, it’s made improvements here and there, and will continue to do so, but those changes haven’t meant much of late.

It’s not growing. Or making much money. It’s stock is down 10 percent as I write this.

Twitter isn’t Facebook. It’s not Google or Apple, either. And that’s okay; maybe Twitter is just Twitter.

And maybe Twitter doesn’t work.

Twitter shares in after-hours post-earnings the past 4 quarters under Dorsey:
2Q: ↓9%
1Q: ↓13%
4Q: ↓11%
3Q: ↓13%

— Scott Austin (@ScottMAustin) July 26, 2016

I like using Twitter, but things are amiss. How long will it miss guidance and have flat user growth? This quarter it posted a net loss of $107 million.

Twitter has some interesting streaming video agreements with entities like the NBA, but will that actually bring more users?

More to the point, what if it doesn’t? Those types of agreements feel like a ploy to re-engage dormant users — a reason for them to actually log-in. That’s not user growth. Improving daily or monthly active users is nice, but everyone is enamored with Twitter getting new users.

To reaccelerate our ads biz, we need to continue to win social mktg budgets & extend into performance & premium mobile video budgets. #TWTR

— TwitterIR (@TwitterIR) July 26, 2016

These are large incremental market opportunities w/ strong growth that we believe #TWTR is well positioned to capture over time.

— TwitterIR (@TwitterIR) July 26, 2016

And cash is generated via ads, and Twitter thinks video is uniquely positioned to help with that while it attempts to buy itself more time.

The problem is that if Twitter is wrong, its house of cards tumbles. No strong video presence means no new users, which means no significant ad revenue. You can only bleed those 313 million users so much.

And a lack of income means more frustrating quarterly earnings calls. And more articles like this (or worse).

Maybe we should just come to terms that we’ve probably already seen what Twitter is and can be. Unless video resurrects the company from the wrong side of the revenue stream, there’s not much left. Twitter has done just about everything to make itself an established entity on its own platform and abroad.

It’s incoming deal with the NFL is critical; football is something Americans just can’t get enough of, even though it seems like everyone’s had their fill of Twitter.

If Twitter fails there, there’s likely no coming back. Give it six months to right itself, then get upset if it hasn’t. Calling for a sale, or for Jack Dorsey to step down — that’s all premature.

But come January — when the NFL season is finished and the NBA is back — we’ll be able to see just what Twitter was able to do with video. Let’s hope it can pull it off; the thought of a Facebook-owned Twitter is not something I’m ready for.