Twitter Refocuses, Chops Vine
November 04, 2016
By Ryan Berman
By announcing quarterly earnings results, a product line discontinuation and a round of layoffs, Twitter certainly made some news this week.
Vine, the platform that lets users post 6-second video clips that loop, will cease over the next few months. Why shutter a popular site with more than 200 million users? Its video-snippet approach seemed a logical extension of Twitter’s 140-character offering. Unfortunately, Twitter was unable to successfully monetize Vine, and it was being left behind by other more flexible video platforms such as Instagram, Snapchat and Facebook.
Vine, acquired by Twitter in 2012 for $30 million, was even being surpassed by a Twitter-owned video property: Periscope. For the time being, Vine users will still be able to view content, but unable to post new content.
Twitter also announced the paring of 9% of its workforce, roughly 350 people, predominantly in the sales and marketing areas. These cuts are expected to save the company about $100 million annually.
The moves come at a critical juncture for Twitter. The company is struggling to achieve profitability. Twitter’s loss of $100 million for Q3 is less than its $130 million loss for Q3 last year; however, revenue growth grew at only 8% to $616 million for the recent quarter. The number of monthly Twitter users increased to 317 million for September 2016.
Twitter is giving Periscope a higher profile. This year, it signed a $10 million deal with the NFL to live-stream 10 football games in an attempt to drive ad revenue.
There were also reports Twitter was considering purchase offers from Salesforce.com, Disney and Google. However, any talks appear to have gone nowhere.