Speaker 1: After more than a decade, the social networking platform Twitter
Speaker 1: is closing in on having a profitable quarter for the
Speaker 1: first time in its history. I'm Jonathan Strickland, and this
Speaker 1: is tech stuff Daily. Twitter is an odd thing. According
Speaker 1: to a recent shareholders call, the service boast three hundred
Speaker 1: thirty million monthly active users. These users post about five
Speaker 1: hundred million messages or tweets every day. Eight out of
Speaker 1: ten of them are accessing Twitter from mobile devices like smartphones.
Speaker 1: About seventy of the people using Twitter are doing so
Speaker 1: outside the United States. More than half of all Twitter
Speaker 1: users are making at least fifty thousand dollars a year.
Speaker 1: The service is definitely popular. People use it, but despite
Speaker 1: that popularity, the company has yet to turn a profitable quarter.
Speaker 1: Year after year, Twitter operates at a loss. The company
Speaker 1: generates revenue, but not to cover costs. Most of that
Speaker 1: revenue comes from advertising. According to the shareholders meeting, Twitter
Speaker 1: lost about twenty one million dollars over the third quarter
Speaker 1: of That's an enormous amount of money, but it's also
Speaker 1: a seventy nine percent drop in losses compared to the
Speaker 1: previous year, and the fourth quarter could be different. Twitter
Speaker 1: sent out a message via appropriately enough a tweet that read,
Speaker 1: if we reach our high end of our adjusted a
Speaker 1: bit DE range for Q four, we will likely be
Speaker 1: GAP profitable. There's a lot to unpack there, so let's
Speaker 1: get to the bottom of this tweet first. You may
Speaker 1: not be familiar with the term a bit death. That
Speaker 1: initialism stands for earnings before interest, tax, depreciation and amortization.
Speaker 1: It's a way to measure a company's performance before taking
Speaker 1: into account all the complicated financing and accounting decisions that
Speaker 1: can impact the bottom line. Then you may not know
Speaker 1: what GAP or g A a P means. That stands
Speaker 1: for generally accepted accounting practices. So, in other words, you're
Speaker 1: talking about a pretty straightforward approach to analyzing the figures
Speaker 1: rather than putting it through some weird manipulative formula. So
Speaker 1: what that tweet was saying is that if Twitter performs
Speaker 1: closer to the upper end of their projected financial performance
Speaker 1: range in Q four, the amount they bring in before
Speaker 1: adjusting for all of that financial nonsense will be greater
Speaker 1: than their costs. According to generally accepted accounting practices, the
Speaker 1: company will on paper at least turn a profit for
Speaker 1: the first time in its history. That history stretches back
Speaker 1: to two thousand six when Jack Dorsey got an idea
Speaker 1: while working for a podcasting company called Odeo. Dorsey had
Speaker 1: this idea for a new tech that would leverage SMS,
Speaker 1: or short message service better known as text messages. Dorsey's
Speaker 1: idea would let people send out a text message to
Speaker 1: a group of friends rather than just a one to
Speaker 1: one communication. That way, if you wanted to give a
Speaker 1: quick update to a group of people, you could You
Speaker 1: might send out the message grabbing lunch, anyone want to
Speaker 1: join me for a taco, and you could send it
Speaker 1: out to your group of followers. From this humble idea
Speaker 1: grew Twitter. Originally, the service was so poor they couldn't
Speaker 1: afford vowels. The original company was spelled t W T
Speaker 1: t R. But then we know from Wheel of Fortune
Speaker 1: that vowels cost two hundred fifty dollars a pop, so
Speaker 1: that would have been another five dollars they'd have to
Speaker 1: PLoP down to spell Twitter properly. All joking aside, this
Speaker 1: little experiment would end up dwarfing the failing business of Odio.
Speaker 1: It was tough for Odio to go toe to toe
Speaker 1: with other podcasting aggregators, particularly Once Apple seriously gone involved,
Speaker 1: the founders decided to pivot and focus on this new
Speaker 1: platform called Twitter. For the first year, Twitter was pretty
Speaker 1: much an internal product being used by the developers, most
Speaker 1: of whom were racking up enormous phone bills due to
Speaker 1: the increase in text messaging they were engaged in while
Speaker 1: using the tool. In two thousand seven, Twitter made a
Speaker 1: big splash at south By Southwest, the enormous festival in Austin,
Speaker 1: Texas that incorporates a film festival, dozens of concerts and
Speaker 1: musical performances, and interactive or tech based discussions. All in
Speaker 1: a couple of weeks. Tons of influential people from various
Speaker 1: spheres attend south By Southwest, and Twitter gained a great
Speaker 1: deal of attention. It experienced its initial growth spurt that year.
Speaker 1: During those early years, Twitter would frequently outgrow its ability
Speaker 1: to handle traffic. The infamous fail Whale became a common site.
Speaker 1: The cartoon whale would pop up whenever Twitter service was offline,
Speaker 1: typically due to server overload. During big events such as
Speaker 1: tech conferences, sporting events, or award ceremonies, Twitter would often
Speaker 1: struggle to stay online. Twitter retired the fail Whale in
Speaker 1: two thousand thirteen, perhaps in an optimistic move that indicated
Speaker 1: the company expected to all but eliminate downtime for the service.
Speaker 1: That's also the year the company held its initial public
Speaker 1: offering and became a publicly traded stock. During that first
Speaker 1: day of trading, the company's stock price rose at one
Speaker 1: point to see above the initial price. That's pretty impressive
Speaker 1: for a company that was still working out its business
Speaker 1: strategy and had not yet made a profitable quarter. As
Speaker 1: of late October, the market value for Twitter is fourteen
Speaker 1: point to three billion dollars. Everyone seems to agree that
Speaker 1: Twitter is a valuable service, even in the wake of
Speaker 1: harassment scandals and public figures denouncing Twitter for failing to
Speaker 1: curtail abusive behavior of its users. But can a company
Speaker 1: really be worth billions of dollars if it can't make
Speaker 1: enough money to be profitable. So far, the answer appears
Speaker 1: to be yes, but many analysts and journalists are keeping
Speaker 1: an eye on Twitter to see if the other shoe
Speaker 1: ever drops. To learn more about Twitter and everything else
Speaker 1: in tech, subscribe to Tech Stuff. That's my long form
Speaker 1: podcast where I dive into details behind our technological world.
Speaker 1: That's all for today. I'll see you again soon