Twitter Lost $69 Million On $254 Million In Revenue During The First Half Of This Year; Twitter Admits 5% Of Its ‘Users’ Are Fake

Twitter Lost $69 Million On $254 Million In Revenue During The First Half Of This Year

JAY YAROW OCT. 3, 2013, 6:24 PM 1,299

Compared to other major tech companies, Twitter is pretty small. The company’s IPO filing reveals that it lost $69 million on $254 million in revenue through the first six months of the year. Facebook earned $1 billion on $3.3 billion in revenue for the same period. Twitter is growing faster, though. Its revenue was up 107% on a year-over-year basis, compared to Facebook which grew 46%.  In this chart, you can see how Twitter’s revenue, and losses have been growing through the years on a quarterly basis. As you can see, Twitter just started getting aggressive on revenue two years ago. The majority of Twitter’s revenue — 87% — comes from advertising. The rest is from data licensing. The chart comes from BI Intelligence. Twitter Admits 5% Of Its ‘Users’ Are Fake

JILLIAN D’ONFRO OCT. 3, 2013, 5:50 PM 661 3

There has long been speculation about how many users Twitter actually has, because there was no concrete number about how many accounts were inactive or fake.

The New York Times reported this year that 20 million, or about 4%, of Twitter’s users are, in fact, fraudulent. Fake accounts are often made by companies who sell new followers to advertisers that want to build large follower populations quickly.

Well, the mystery is officially solved. According to Twitter’s S-1 filing this afternoon, we see that the company estimates that less than 5% of its monthly active users are fake. (Twitter currently has 215 monthly active users, so that’s about 10.75 million users that are fake.)

When Facebook IPO’d, it had about 5-6% fake users, so these numbers are pretty close.

Here’s exactly what Twitter said in its S-1:

“The numbers of our active users and timeline views are calculated using internal company data that has not been independently verified. While these numbers are based on what we believe to be reasonable calculations for the applicable period of measurement, there are inherent challenges in measuring usage and user engagement across our large user base around the world. For example, there are a number of false or spam accounts in existence on our platform. We currently estimate that false or spam accounts represent less than 5% of our MAUs. However, this estimate is based on an internal review of a sample of accounts and we apply significant judgment in making this determination. As such, our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have currently estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our active users, but we otherwise treat multiple accounts held by a single person or organization as multiple users for purposes of calculating our active users because we permit people and organizations to have more than one account. Additionally, some accounts used by organizations are used by many people within the organization. As such, the calculations of our active users may not accurately reflect the actual number of people or organizations using our platform.”