Twitter’s Conundrum: More Users, Lower Revenue
Any company that depends on advertising for the bulk of its revenue is in trouble, at least for a while. The novel coronavirus pandemic, and the actions taken to slow its spread, have caused economies around the world to slow down. Certain industries, like travel and restaurants, have been hit exceptionally hard.
Twitter (NYSE: TWTR) finds itself in a unique position. The company's platform is extremely useful during a crisis like this, providing users with information and news in real time. "Twitter's purpose is to serve the public conversation, and in these trying times our work has never been more critical," CEO Jack Dorsey said in a recent press release.
But ultimately, Twitter's business is selling ads, and that business is coming under pressure. With some analysts predicting a 30% drop in U.S. gross domestic product in the second quarter, times are going to be tough for the companies that don't fail outright. And those companies won't be too keen on shelling out for Twitter ads.
Source Fool.com
