As a micro-blogging platform for users to create and receive timely information, Twitter makes money by advertising (the majority of its revenue) and data licensing. Recently, Twitter has made efforts to improve its advertising performance including integrating with Google’s ad serving platform, Double Click, to get logged-out users on Twitter, allowing casual users to check out what’s going on in the world with the help of Moments, utilizing Periscope to build a competing video live streaming platform, as well as a buy button and video ads.
Although all the efforts have the potential to increase advertising fee, there is still challenges for Twitter due to its problem of stalled increase in users.
In Q4 2015, there were 320 million active users of Twitter, which was only one fifth of active users per month of Facebook.Data source Such number of active users is not supportive of the thesis that there is value in Twitter shares for businesses which are about to extend growth. Neither does it help prove that Twitter has enough scope to compete with Google or Facebook.
To solve advertising problem from the bottom, Twitter should rethink the user experience and work more with the developer community to foster its ecosystem.