Twitter CEO apologizes for hack, confirms some private messages were accessed

Twitter CEO apologizes for hack, confirms some private messages were accessed

Despite the increase in users, Twitter said advertising revenue fell 23%, including 25% in the U.S., with many companies pulling back on spending given the global pandemic.

Shares of Twitter rose 4% in early trading Thursday following the earnings results.

Twitter's average monetizable daily active users (mDAU) increased 34% year over year to 186 million, above analysts' target of 176 million. Despite some modest rebound from the pandemic-induced economic slump, Twitter said that "many brands slowed or paused spend in reaction to USA civil unrest" in May and June.

Chief executive Jack Dorsey opened a conference call with analysts by apologizing for the hack that compromised the accounts of high-profile users last week, saying "we feel bad".

The company reported a second-quarter loss of US$1.2-billion, largely driven by the reversal of a tax benefit established previous year, when the company transferred intellectual property to Ireland.

Revenue slumped 19 per cent from a year ago to US$683 million.

Echoing earlier guidance, Twitter said it expects data licensing revenue to "moderate" for the rest of the year. Because of the second quarter's steep coronavirus-related losses, Twitter did not make enough money to take advantage of the tax benefit.

Twitter acknowledged late Wednesday that in 36 of the 130 accounts that were compromised, hackers were able to access direct messages meant to be private, adding to the severity of the incident.

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"First and foremost, we have a really high bar for when we would ask consumers to pay for aspects of Twitter", Dorsey said.

Victims of the hack included politicians such as US presidential candidate Joe Biden and former US President Barack Obama, CEOs including Tesla's Elon Musk and Amazon founder Jeff Bezos, and celebrity Kanye West.

Dorsey said of the incident: "We understand our responsibilities and are committed to earning the trust of all of our stakeholders with our every action, including how we address this security issue".

Twitter, an important tool used by President Donald Trump, is seen by some analysts as an important element in public and political discussion, and a key to its growth.

"We are hearing this resonate and people are taking note of our difference".

'We will continue to go above and beyond here as we continue to secure our systems and as we continue to work with external firms and law enforcement'.

"Twitter's strength as a news and entertainment source has helped buoy engagement during the pandemic as housebound consumers use the platform for real-time news and information", said eMarketer analyst Jasmine Enberg.

The company said it's exploring additional business lines, including a possible subscription offering, as a way to supplement advertising, which makes up more than 82% of total revenue. "We do think there is a world where subscription is complementary, where commerce is complementary, where helping people manage paywalls. we think is complementary".

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