Much of Twitter's opportunity already has been lost

John Shinal | Special for USA TODAY

SAN FRANCISCO — The second-quarter surge in digital advertising revenue just reported by Google, along with the large quarterly gain also expected from Facebook, shows just how much of Twitter’s sales opportunity is being captured by its competitors.

The huge gains in sales and profit at its much-larger rivals come as Twitter on Tuesday is expected to report yet another quarterly operating loss for the same period amid disappointing user growth. Twitter shares (TWTR) closed Monday at $34.70, near a 52-week low, and off 1% for the year.

The San Francisco-based social media company is expected to post operating and net losses of more than $500 million in 2015, according to Rosenblatt Securities, despite surging sales.

That figure is on top of the $1.55 billion in aggregate operating losses Twitter incurred during the five years ended in 2014.

The investor money Twitter has burned through has come and gone like the dozens of executives who’ve joined and then departed the company since its founding in 2006.

During those same years, hundreds of millions of consumers have visited Twitter but decided not to sign up for its service.

In an 8,500-word Internet post called, “What Twitter Could Be,” early Twitter investor Chris Sacca this month flagged what consumers have already shown to be its most persistent flaw: Twitter is too difficult for the average consumer to use.

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“Almost one billion users have tried Twitter and not stuck around,” wrote Sacca, among Twitter’s largest outside shareholders at the time of its November 2013 IPO.

That sure sounds like a blown opportunity.

After nine years of watching users come and go, the company last week finally unveiled what it calls a “Safety Center” to help protect users from being bullied or harassed on the site.

How’s that for attention-to-user experience?

True, Twitter is an important tool for those trying to build an audience, including members of the media, celebrities, musicians, artists and professional sports teams.

Yet for consumers, what value the site may hold is buried within a huge community of lurking strangers.

Twitter reported in April that some of its online advertising auctions in the first quarter offered so little return on investment that online marketers balked at paying the prices Twitter was asking.

After almost a decade, “Twitter is still trying to figure out its business,” said Brian Solis, an analyst with the San Francisco-based industry research firm Altimeter Group. (Altimeter was acquired by consulting firm Prophet last week.)

Two years ago, as Twitter was preparing for its IPO, this column pointed out how daunting a challenge it would face from its two larger rivals.

This year, Wall Street expects Google to boost revenue by $18 billion, while Facebook is seen growing its top line by $4.6 billion.

Twitter is expected to add $800 million in new sales, or just 3.5% of the combined 2015 total for the three companies.

In the second quarter, Twitter's sales are forecast to increase 54% to $481 million. Facebook's sales are expected to increase 37%, but to nearly $4 billion.

As it plays catch-up on sales and profit, Twitter’s future leadership structure remains unsettled, as it’s yet to hire a permanent replacement for former CEO Dick Costolo.

Nine years after its founding, Twitter remains a profitless, distant No. 3 in its largest business — a very weak competitive position.

Unless the company hires a new CEO who can quickly revive its fortunes, Twitter looks headed for either permanent niche market status or takeover.

Follow USA TODAY columnist John Shinal: @johnshinal