Profit at Twitter, the social media platform where President Trump has amassed 66 million followers, sank 95 percent during the summer as CEO Jack Dorsey grappled with advertising software bugs and invested in tools to ensure accurate election information.
Net income dropped to $36.5 million, or 5 cents a share, in the three months through September, from $789 million, or $1.02, a year earlier, the San Francisco-based company said in a statement. Among the drivers was a 57 percent increase in expenses, driven by workforce growth, research and development and a lack of major events like the World Cup soccer tournament that drove ad sales higher a year earlier.
"We believe our core value propositions of launching something new and connecting with what’s happening on Twitter continue to resonate very strongly with advertisers," the San Francisco-based company said in a letter to investors. "Slower business over the summer was due to a relatively lighter slate of big events and launches in July and August compared to 2018."
The number of active users who could view ads, Twitter's metric for gauging its audience size, grew 17 percent to 145 million a day. The company's ability to reach them, however, was inhibited by glitches with an old mobile-ad system that wasn't targeting customers correctly.
Twitter, like social media rivals Facebook and YouTube, is also grappling with political challenges. Congressional scrutiny of the industry has intensified in the wake of intelligence agency assessments that the platforms were exploited by Russian operatives seeking to sway voters in the U.S. presidential election three years ago
All of them have invested in tools to block inauthentic posts designed to mislead voters, and Twitter and Facebook have introduced archives of political ads and posts that users can review to gauge their reliability.
"We have put a lot of focus on our transparency center, making sure people have this ability to see who's spending for political ads," Dorsey said on an earnings call Thursday. The platform will continue to "look broadly at the role of political advertising on the service and where we can improve it," he added.
While tackling misleading political content has been a priority for Democrats, who believe it helped doom Hillary Clinton's campaign in 2016, Republicans have accused social media platforms in liberal-leaning Silicon Valley of using that as a pretext to censor conservative viewpoints.
Trump addressed the topic with Dorsey himself in an Oval Office meeting earlier this year, arguing that his own following would be much higher without so-called shadow-banning. Trump has the 11th-highest number of followers among all Twitter users, according to Brandwatch, topped by a small list of celebrities from soccer player Cristiano Ronaldo to singers Justin Bieber and Rhianna and former President Barack Obama.