In investing, as in life, information is power. We make choices based on the data at hand, sifting through what has happened in the past in order to gain an idea of what lies before us.
Take away the data, and choices are made in the dark, to less than optimal – and perhaps dismal – effect. Or, to paraphrase an old movie, “Pay no attention to that data behind the curtain.” For it is, indeed, a curtain that is coming down to hide all manner of stats from all manner of tech companies. It’s a troubling trend, if indeed a trend transpires.
In the latest news, Twitter has drawn its own curtain down, at least when it comes to information on monthly users. That tally has fallen for several quarters running, and now, the social media giant has said it will stop announcing that monthly user count. The disclosure comes courtesy of the firm’s latest earnings report, where the most recent monthly user count declined by another five million, as measured in the latest quarter, to 321 million (as measured quarter over quarter, not year over year). This is the lowest number in roughly two years, according to reports.
To be sure, it’s not as if the company is hiding everything that pertains to users. Twitter will now disclose how many daily users it has in its base, which makes things look a bit better. By being selective in what it discloses – which is within the company’s rights, of course – the daily count may shift the narrative a bit, as it grew to 126 million daily users, up from 115 million (which is measured year on year).
The optics are such that Twitter hopes observers will not compare it directly to companies such as Facebook, which has been growing (and where that company added 49 million users in its latest reported period).
Interestingly, too, the company will now call these users mDAUs – which is short for “monetizable daily active users.” Twitter has had its own actions in place to wipe out the accounts that are tied to bots and spam, so a daily count may be more reflective of “real” people who can encounter and interact with advertising. And then again … the trend is down, as evidenced by the monthly users, so might we expect to see pressure on the mDAU metric at some point?
The move is certainly a bit more … we’ll say, generous than has been seen by some tech peers.
Just last week, Facebook said it will eventually stop disclosing the number of users that … well, use Facebook, instead reporting the broader group that uses not only that social media network, but also WhatsApp and Instagram. As the company directs investors to shift their attention to a “family” of applications, it is at the same time adding new users across the eponymous app, but at a slower pace than has been seen in prior years. Stats show that in recent months, the company added two million users in North America and five million users in Europe – and these are regions where the company derives the bulk of its revenues.
Add these two recent corporate reporting shifts to the news that Apple, famously, has stopped disclosing the unit sales of hardware spanning iPhones, iPads and Macs.
Each of these moves seems to smack of decisions to cloud or cloak disclosure of trends that have been weakening, and to focus on what’s going well. But that leaves investors without the ability to pick and choose among the data that are important to them. Pointing to one metric over another is called spin. Taking metrics away to present what might be rosier than what’s really beneath the surface seems a strategy based on convenience. And investors will suffer as a result.