Benner on Tech: Twitter #Fail, Video Ads Rule

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About ...

Like so many tech companies before it, Twitter was going to announce its quarterly numbers after the markets closed. Ho hum.

But a financial data provider named Selerity stumbled upon a copy of Twitter’s results and tweeted them out to the world at around 3 p.m. ET.

The New York Stock Exchange halted trading of Twitter shares. Having had lots of time to digest the bad numbers, investors dumped the stock when it resumed trading. The price plummeted more than 18 percent.

Twitter said first quarter revenue hit $436 million, below Wall Street expectations of $456.2 million. It also lowered its second quarter and full-year revenue forecasts by so much that analysts began to call Chief Executive Dick Costolo’s credibility into question.

The micro-blogging site has had the same problems seemingly forever -- users have been slow to adopt Twitter (compared with Facebook), and the company isn’t monetizing users as much as investors would like.

Expect tons of stories in the coming days about how long Costolo can keep his job and whether the product can ever have mass appeal. Don’t expect life to get better for Twitter anytime soon.

** Fun facts: In 2011, Selerity found a Microsoft earnings announcement well before the company was scheduled to release its results and tweeted out the numbers. Nasdaq, which hosts Twitter’s investor relations page, took responsibility for yesterday's accidental release.

NewFronts!

If you’ve wondered why stories about media companies and online advertising are taking over your social media feeds, it’s because Monday kicked off this year’s Digital Content NewFronts, when online media players try to get advertisers to buy online video ads (even if it means cannibalizing TV ad spending). Expect everyone -- from dead-tree news companies to Internet platforms to blogs -- to explain why they’re all really digital video purveyors.

In the New York Times's highlight reel: Yahoo inundated advertisers with programming. Maker Studios promised to hand Madison Avenue hordes of young, digital-native, spendy millennials. Buzzfeed promised metrics.

** Other NewFronts news:

The Wall Street Journal put together a 40-person team to crank out lots of videos. (Digiday)

Vox Chairman and CEO Jim Bankoff says online ad spending is shifting such that quality content will soon rule online media. (the Wall Street Journal)

Maker Studios is working with Disney to make videos that appeal to Marvel comics fans. It’s also working with ESPN to make X Games-related video content and with ABC’s Lincoln Square Productions to make nonfiction videos about politics and culture. (Deadline)

YouTube will back original series created by four of its best-known stars -- the Fine Brothers, Prank vs. Prank, Joey Graceffa and Smosh -- and it will also partner with AwesomenessTV to make movies that feature YouTube creators. Startups such as Vessel and Victorious have started stealing YouTube talent with better film, book and speaking engagement deals. (Deadline)

Ad dollars have migrated from television to the web, and now TV executives are fighting back with new tools that help brands target ads. Some tools gather information about what people buy and match it against the programs they watch. (the Wall Street Journal)

Earnings Roundup

GoPro beat Wall Street’s quarterly revenue and profit estimates on the strength of overseas sales. (Bloomberg)

Samsung reported a 40 percent earnings decline and said its financial results would improve if component sales and demand for the new Galaxy S6 stayed strong. (Bloomberg)

Reporting today: Baidu, Flextronics, GrubHub and Yelp.

Ventureland

Cyanogen’s partnership with OnePlus is over, and the software company is looking for a new hardware partner to use its custom Android OS. (Android Authority)

Foursquare isn’t going anywhere, but employees are leaving in droves as the company struggles to figure out what to do as user engagement stagnates. (Mashable)

Ouya tripped a debt covenant, and now it’s looking for a buyer. The gaming company’s investors include Alibaba, Kleiner Perkins, Mayfield Fund, Occam Partners, Shasta Ventures and NVIDIA. (Fortune)

Uber is reversing course in Germany, where it will end its low-cost UberPop service and only use certified drivers. (Bloomberg) The company has brought its food delivery service to Chicago and New York. Watch out, GrubHub.

These entrepreneurs raised more than $1 million on Kickstarter and then their product never materialized. (New York Observer)

VCs fetishize disruption but can’t disrupt their own world. (San Francisco Chronicle)

Most entrepreneurs go where people aren’t … Venture people are the exact opposite. It’s, 'I’m going to do the same thing everybody else does, but better because I’m more famous and more awesome.'

People and Personnel Moves

Brian Mooney is taking over as CEO of Merchant Customer Exchange, which is making the CurrentC mobile payments to rival Apple Pay. Mooney was most recently the CEO of Bank of America Merchant Services.

Companies

Apple Watch users have complained that the device doesn’t work when worn over their dark tattoos. (Apple Insider) The company’s earnings results show that China's consumer market is maturing to a point where workers can finally afford to buy the stuff they make. (Bloomberg View)

Facebook is shutting down the Friends data API in a year, which lets users give information about their friends’ data such as status updates and check-ins to third-party apps. (TechCrunch)

GoPro bought Kolor, a French virtual reality software maker.

IBM raised its quarterly dividend for its 20th straight year as the company fights to turn itself around. (Bloomberg)

PayPal finally created one-touch payments for mobile and desktop websites. (Re/code)

Tesla will unveil new batteries Thursday that can power homes, businesses and even utilities -- a business some believe could generate tens of billions of dollars over the next 10 years. (Bloomberg)

** Also:  What does it take to be a success a la Elon Musk? His ex-wife Justine Musk weighed in on Quora. (Vox

Security Watch

Can’t get enough Silk Road stories? Check out this deep dive into the world of Ross Ulbricht. (Wired)

China's Great Firewall has been intercepting Facebook’s login system, which can force sites that use Facebook Login to redirect traffic elsewhere. (the Verge)

Media Files

The Daily Dot, the publication that covers online communities like local papers used to cover real-life local news, raised $10 million from another, undisclosed media company. And this profile of the publication is pretty great. (New York Observer)

News and Notes

An iPad malfunction delayed American Airlines flights. (Quartz)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Maria Lamagna at mlamagna@bloomberg.net