Jack Dorsey, CEO of Twitter Inc.(TWTR - Free Report) , is facing another problem in convincing advertisers to return to Twitter, as new research showed that up to 15% of Twitter’s 319 million users can be bots rather than human.
The research was conducted by University of Southern California and Indiana University. Researchers used more than 1,000 features to identify bot accounts on Twitter. It was estimated that between 9% and 15% of active Twitter accounts are bots.
The estimate of 15% is almost twice of Twitter’s own estimates. In Twitter’s Q4 earnings, the company reported up to 8.5% of accounts could be bots.
Twitter is hit particularly hard by this research because the company is already struggling to persuade advertisers to come back. Dorsey, one of the site’s co-founders, came back in 2015 as chief executive and hopes to turn around the company’s fortune; however, little progress has been made.
The company is still far away from making its first profit and stale user growth. The loss from operation of fourth quarter was $143 million, compared to $67 million during the same time last year. Twitter also reported just 4% growth to 319 million monthly active users year-over-year.
The company’s performance and the bot scandal puts further pressure on Dorsey to step down as Twitter’s CEO.
A Twitter spokesperson recognized that bot accounts often have negative connation but can be extremely beneficial, like those that automatically alert people of natural disasters or from customer service points of view.
While the researchers agreed on the benefits of the bot accounts, they also pointed out, “there is a growing record of malicious applications of social bots. Some emulate human behavior to manufacture fake grassroots political support… and promote terrorist propaganda and recruitment.”
This is a problem that not only Twitter is having but all social media platforms, as Google’s (GOOGL - Free Report) YouTube is currently suffering from ads placement issues with its advertisers.
Twitter closed the day at $15.09 per share, up 0.07%.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth.Download this IPO Watch List today for free >>