On Wednesday, the micro-blogging site Twitter reported a net loss of $1.14 billion in 2020, amidst the massive controversy the platform is facing globally for its biased censorship. The development also comes amidst the economic crisis caused due to the global Coronavirus pandemic, and during the ongoing tussle of the social media giant with the Indian government over its refusal to ban accounts inciting violence in the aftermath of the anti-farm law agitation in India.
As per reports, Twitter’s expenses increased by 19% on a year over year basis, resulting in a total expenditure of $3.69 billion. At the same time, its revenues amounted to $3.72 billion, an increase of 7% year over year. Although the company registered an operating income of $27 million, its final results showed a net loss of $1,135,626,000, due to interest expenses and tax liabilities.
In a statement, the microblogging site said, “2020 net loss was $1.14 billion, representing a net margin of -31 per cent and diluted EPS [earnings per share – Ed.] of -$1.44. This compares to 2019 net income of $1.47 billion, representing a net margin of 42 percent and diluted EPS of $1.87. Both periods were affected by non-cash, tax-related adjustments.”
Reportedly, Twitter is expecting a revenue between $940 million and $1.04 billion in the first quarter of this year. In the last quarter of 2020, Twitter reported $1.29 billion in revenue. This resulted in a 7% growth in its shares on Wednesday. At the same time, there was a 28% increase in year-over-year revenue. The monetisable daily user count bose rose by 27%, leading to a total of 192 million.
On Tuesday, Twitter CEO Jack Dorsey informed, “2020 was an extraordinary year for Twitter. We are more proud than ever to serve the public conversation, especially in these unprecedented times.” He claimed that the micro-blogging site is planning to promote ‘healthier conversations’ and is excited to continue innovation in 2021. He also took potshots at the former US President Donald Trump and claimed that Twitter is larger than any one topic or individual.
Twitter feud with Indian Govt may prompt companies to stop advertising on the platform
In a display of arrogance and high-handedness, Twitter refused to comply with the Indian laws and instead decided to enforce its ‘own rules’. While citing freedom of speech on Wednesday, the micro-blogging site refused to adhere to the government’s directives and block the handles of those individuals inciting and advocating violence under the garb of anti-farm law agitation. This sparked off a spat between the Indian government and the social media giant. However, later the site blocked most of the accounts as asked by the government.
Amidst the controversy, several companies have been mulling to pull out the plug on advertising on Twitter, according to a report by The Economic Times. Quoting brand experts and advertisers, the report said that while most brands are sitting on the fence at present, watching how the Twitter-government face-off plays out, some of them may pull back ads from the platform in the coming days depending on how the situation evolves.
According to brand strategy expert Harish Bijoor, brands tend to move away from advertising on platforms that are under threat of any kind. “For every Twitter, there is a Koo waiting in the wings. For the new apps, it is a big opportunity, though they will take some time and traction for the ability to perform with an equal degree of seamlessness as Twitter,” he emphasised.