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Measuring how bad Twitter is

Wednesday, October 12, 2016 18:24
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(Before It's News)

My last blog post (exposing Twitter’s excessive costs) prompted horror story emails on Twitter.

But the best thing sent to me was a financial history of Facebook. The first copy came from Twitter.

Here are the numbers.

Year Ended December 31,
2014
2013
2012
2011
2010
(in millions, except per share data)
Consolidated Statements of Income Data:
Revenue
$
12,466

$
7,872

$
5,089

$
3,711

$
1,974

Total costs and expenses(1)
7,472

5,068

4,551

1,955

942

Income from operations
4,994

2,804

538

1,756

1,032

Income before provision for income taxes
4,910

2,754

494

1,695

1,008

Net income
2,940

1,500

53

1,000

606

Net income attributable to Class A and Class B common stockholders
2,925

1,491

32

668

372

Earnings per share attributable to Class A and Class B common stockholders (2):
Basic
$
1.12

$
0.62

$
0.02

$
0.52

$
0.34

Diluted
$
1.10

$
0.60

$
0.01

$
0.46

$
0.28

(1)
Total costs and expenses include $1.84 billion$906 million$1.57 billion, $217 million, and $20 million of share-based compensation for the years ended December 31, 2014201320122011, and 2010, respectively.
(2)
See Note 3 of the notes to our consolidated financial statements for a description of our computation of basic and diluted earnings per share attributable to Class A and Class B common stockholders. 

When Facebook had $1.974 billion of revenue it had $1.008 billion of income before taxes.

Twitter is kind of different.

Year Ended December 31,
2015
2014
2013
2012
2011
(In thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue
$
2,218,032
$
1,403,002
$
664,890
$
316,933
$
106,313
Costs and expenses(1)
Cost of revenue
729,256
446,309
266,718
128,768
61,803
Research and development
806,648
691,543
593,992
119,004
80,176
Sales and marketing
871,491
614,110
316,216
86,551
25,988
General and administrative
260,673
189,906
123,795
59,693
65,757
Total costs and expenses
2,668,068
1,941,868
1,300,721
394,016
233,724
Loss from operations
(450,036
)
(538,866
)
(635,831
)
(77,083
)
(127,411
)
Interest expense
(98,178
)
(35,918
)
(7,576
)
(3,255
)
(1,271
)
Other income (expense), net
14,909
(3,567
)
(3,739
)
1,168
(1,064
)
Loss before income taxes
(533,305
)
(578,351
)
(647,146
)
(79,170
)
(129,746
)
Provision (benefit) for income taxes
(12,274
)
(531
)
(1,823
)
229
(1,444
)
Net loss
$
(521,031
)
$
(577,820
)
$
(645,323
)
$
(79,399
)
$
(128,302
)

When Twitter had $450 million of operating losses and $533 million of losses before tax.

There was about $1.5 in difference in costs.

Facebook does more, had more growth runway and had much lower costs.

I received a lot of anecdotes and wild parties and profligate spending, and the plural of anecdote is data – but few things are as convincing as the raw numbers.

The conclusion is inescapable. Jack Dorsey – the Twitter CEO – should be fired.

This should happen regardless of whether Twitter is bought or not. He simply does not deserve the job.

John

PS. Twitter staff – I am not exaggerating. Look at the young man on your left and the young woman on your right. Only one of you three will keep your job.

Don’t worry. It should be worse in the C-Suite.

Prepare resumes.

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