Measuring how bad Twitter is

My last blog post (exposing Twitter's excessive costs) prompted horror story emails on Twitter.

But the best thing sent to me was a financial history of Facebook. The first copy came from Twitter.

Here are the numbers.

Year Ended December 31,
	2014				2013				2012				2011				2010
	(in millions, except per share data)
Consolidated Statements of Income Data:
Revenue	$	12,466			$	7,872			$	5,089			$	3,711			$	1,974
Total costs and expenses(1)	7,472				5,068				4,551				1,955				942
Income from operations	4,994				2,804				538				1,756				1,032
Income before provision for income taxes	4,910				2,754				494				1,695				1,008
Net income	2,940				1,500				53				1,000				606
Net income attributable to Class A and Class B common stockholders	2,925				1,491				32				668				372
Earnings per share attributable to Class A and Class B common stockholders (2):
Basic	$	1.12			$	0.62			$	0.02			$	0.52			$	0.34
Diluted	$	1.10			$	0.60			$	0.01			$	0.46			$	0.28

(1)	Total costs and expenses include $1.84 billion, $906 million, $1.57 billion, $217 million, and $20 million of share-based compensation for the years ended December 31, 2014, 2013, 2012, 2011, and 2010, respectively.

(2)	See Note 3 of the notes to our consolidated financial statements for a description of our computation of basic and diluted earnings per share attributable to Class A and Class B common stockholders.

When Facebook had $1.974 billion of revenue it had $1.008 billion of income before taxes.

Twitter is kind of different.

Year Ended December 31,
		2015				2014				2013				2012				2011
		(In thousands, except per share data)
Consolidated Statement of Operations Data:
Revenue		$	2,218,032			$	1,403,002			$	664,890			$	316,933			$	106,313
Costs and expenses(1)
Cost of revenue			729,256				446,309				266,718				128,768				61,803
Research and development			806,648				691,543				593,992				119,004				80,176
Sales and marketing			871,491				614,110				316,216				86,551				25,988
General and administrative			260,673				189,906				123,795				59,693				65,757
Total costs and expenses			2,668,068				1,941,868				1,300,721				394,016				233,724
Loss from operations			(450,036	)			(538,866	)			(635,831	)			(77,083	)			(127,411	)
Interest expense			(98,178	)			(35,918	)			(7,576	)			(3,255	)			(1,271	)
Other income (expense), net			14,909				(3,567	)			(3,739	)			1,168				(1,064	)
Loss before income taxes			(533,305	)			(578,351	)			(647,146	)			(79,170	)			(129,746	)
Provision (benefit) for income taxes			(12,274	)			(531	)			(1,823	)			229				(1,444	)
Net loss		$	(521,031	)		$	(577,820	)		$	(645,323	)		$	(79,399	)		$	(128,302	)

When Twitter had $450 million of operating losses and $533 million of losses before tax.

There was about $1.5 in difference in costs.

Facebook does more, had more growth runway and had much lower costs.

I received a lot of anecdotes and wild parties and profligate spending, and the plural of anecdote is data - but few things are as convincing as the raw numbers.

The conclusion is inescapable. Jack Dorsey - the Twitter CEO - should be fired.

This should happen regardless of whether Twitter is bought or not. He simply does not deserve the job.



John

PS. Twitter staff - I am not exaggerating. Look at the young man on your left and the young woman on your right. Only one of you three will keep your job.

Don't worry. It should be worse in the C-Suite.

Prepare resumes.