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Twitter, which has struggled to grow its user base to the size of some of its social networking rivals, is reporting earnings this week not long after news that companies including Disney would not be moving to acquire the service.
This year, eMarketer estimates, more than 52 million people in the US will use Twitter on a monthly basis, and just shy of half will use the service on both PCs and mobile devices. Mobile-only Twitter use is becoming more common in the US as desktop- based usage shrinks, and will account for a majority of US users in 2018 for the first time.
Currently, just 19.5% of internet users and 16.1% of the population of the US uses Twitter, compared with 51.5% of the population using Facebook. On a worldwide basis, Twitter penetration is even lower: Only 3.9% of people around the world use Twitter this year, and by 2020 the figure is only expected to rise to 4.8%.
“eMarketer lowered its outlook for Twitter usage based on last quarter’s results,” said principal analyst Debra Aho Williamson. “At this point, we don’t see many signs of significant growth in usage. Live streaming could bring in new users, but Twitter’s other efforts to attract new users aren’t yet showing much success.”
Ad revenues at Twitter are growing, however. This year, eMarketer estimates digital ad revenues at the company will increase 13.2% to $2.26 billion, of which $2.00 billion will come from mobile placements. Double-digit growth in overall ad revenues as well as mobile revenues specifically is expected through at least 2018.
“Twitter is making good on its promise to generate more revenue from video advertising,” said Williamson. “Twitter has always been a place where consumers go to talk about what they&rsqu;ore watching on TV, and gaining a share of lucrative video ad budgets is an obvious next step for the company.”
Live streaming is also a factor in Twitter’s future.
“Twitter’s deal with the NFL to livestream Thursday night football games is off to a decent start,” said Williamson. “The viewer numbers are good, but not overwhelming. However, this is a new behavior that will take time to catch on. We believe that live streaming will continue to grow, not only at Twitter but across the web.”
Still, recent news has been negative as companies including Disney recently decided not to purchase Twitter.
“Twitter is, without question, in a challenging place, after news that several major media companies decided not to pursue an acquisition,” noted Williamson. “We continue to believe that Twitter’s strength comes from being a place where users go to report, share and discuss what is going on around them, as it is happening. No other service does that as well as Twitter does. As a result, we feel Twitter could be a valuable asset for the right buyer.”
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