Twitter experiences a plunge in shares on Thursday the 24th of November after they reported that a glitch affected the messaging apps ad-targeting ability, causing a drop in revenue growth in the third quarter of the year.
Twitter revenue rose by 9% from the previous year to $824 million, which is well far below the forecast of wall street analysts, believed to be impacted by what the company referred to as “revenue product issues.”
Twitter shares slid as much as a whopping 20% in pre-market trade, which is the most significant recorded decline in more than one year.
Twitter claims that the revenue was hit by bugs, which made it more challenging to deliver the targeted advertising as well as several seasonal factors.
The chief executive of Twitter Jack Dorsey said during a conference call that “Unfortunately we had some missteps and bugs. These are issues we identified quickly and are working quickly to fix.”
According to Twitter’s investor relations team, the issue was reported to have affected the app’s ability to deliver ads, which is a significant part of the company’s Revenue.
A tweet by Twitter’s investor relations team reads, “In Q3, we discovered, and took steps to remediate, bugs that primarily affected our legacy Mobile Application Promotion product, impacting our ability to target ads and share data with measurement and ad partners.
We also discovered that certain personalization and data settings were not operating as expected. We believe that, in aggregate, these issues reduced year-over-year revenue growth by three or more points in Q3.”
Tweeter chief financial officer Ned Segal said that the app was working hard to fix the problem, but this glitch is expected to have a harmful impact on the fourth quarter of 2019.
The area is mainly affected by the Twitter bug where outside of the United States, where Twitter’s ad revenue was as little as 5% as compared with the 11% recorded for the United States.
overall the revenue from advertising totaled 702 million dollars by 8% from the previous year.
the outcome highlighted some challenges for Twitter, which has continuously struggled to keep an even pace with rival social media platforms as it strives to get rid of abusive content fake accounts and manipulation effort.
Analyst Jasmine Enberg of eMarketer said, “The miss (on revenue) wasn’t just because of tough comparisons, which were expected to dampen their revenue growth, but issues with their ad product. That could impact their performance in the all-important Q4”.
Twitter has boosted the number of monetizable daily active users on the platform, the new measurement that the platform uses, by 6 million in the last quarter to 145 million.
The social network has now stopped using the count of monthly active users, which used to be 330 million earlier in 2019, in favor of the new medium of measurement of daily users on the mobile application or on the Twitter website who see ads on their feeds.
Dorsey mentioned that the growth in users looks like a result of the “steady refinement of Twitter” as the app always works to improve its services and weed out inappropriate content.
Saying that “This is an incredibly strong foundation to build upon.”
Dorsey said that the Twitter app had improved its automated systems to get rid of unwanted content, and now continually takes down more than 50 percent of such material “proactively” and usually “without a bystander or first-person report.”