Twitter suspended 58 million accounts in 4Q
By BARBARA ORTUTAY and KEN SWEET
The Associated Press
Wednesday, July 18
NEW YORK (AP) — Twitter suspended at least 58 million user accounts in the final three months of 2017, according to data obtained by The Associated Press. The figure highlights the company’s newly aggressive stance against malicious or suspicious accounts in the wake of Russian disinformation efforts during the 2016 U.S. presidential campaign.
Last week, Twitter confirmed a Washington Post report that it had suspended 70 million accounts in May and June. The cavalcade of suspensions has raised questions as to whether the crackdown could affect Twitter’s user growth and whether the company should have warned investors earlier. The company has been struggling with user growth compared to rivals like Instagram and Facebook.
The number of suspended accounts originated with Twitter’s “firehose,” a data stream it makes available to academics, companies and others willing to pay for it.
The new figure sheds light on Twitter’s attempt to improve “information quality” on its service, its term for countering fake accounts, bots, disinformation and other malicious occurrences. Such activity was rampant on Twitter and other social-media networks during the 2016 campaign, much of it originating with the Internet Research Agency, a since-shuttered Russian “troll farm” implicated in election-disruption efforts by the U.S. special counsel and congressional investigations.
Suspensions surged over the fourth quarter. Twitter suspended roughly 15 million accounts last October. That number jumped by two-thirds to more than 25 million in December.
Twitter declined to comment on the data. But its executives have said that efforts to clean up the platform are a priority, while acknowledging that its crackdown has affected and may continue to affect user numbers.
Twitter said in April it had 336 million monthly active users, which it defines as accounts that have logged in at least once during the previous 30 days. The suspended accounts do not appear to have made a large dent in this number, which was up 3 percent from a year earlier. Twitter maintains that most of the suspended accounts had been dormant for at least a month, and thus weren’t included in its active user numbers.
Michael Pachter, a stock analyst with Wedbush Securities, said he thinks the purge late last year may have been part of an initial sweep of inactive accounts that had little effect on activity or advertising revenue. But he said he expected advertising revenue to fall 1 to 2 percent due to the more recent purge last week, when Twitter said it was removing frozen accounts from follower counts.
He expects the company to be upfront about the impact when it announces quarterly earnings on July 27, and said the cleanup is good for users and advertisers. “They’re certainly doing the right thing,” he said.
Scott Kessler, an analyst with CFRA who has a “sell” rating on Twitter stock, said multiple reports and vague clarifications by executives are creating uncertainty about what Twitter’s numbers really mean.
The purge activity “adds a level of uncertainty,” he said. “As an analyst, I want a more genuine view of the user base.”
Chief Financial Officer Ned Segal said in February that some of the company’s “information quality efforts” that include removing accounts could affect monthly user figures. Segal offered no specifics.
Six months later, in late June, Twitter disclosed that its systems found nearly 10 million “potentially spammy or automated accounts per week” in the month of May, and 6.4 million per week in December 2017. That’s up from 3.2 million per week in September. The company didn’t say how many of these identified accounts were actually suspended.
Following the Post report, which caused Twitter’s stock to drop sharply, Segal took to Twitter to reassure investors that this number didn’t count in the company’s user metrics. “If we removed 70M accounts from our reported metrics, you would hear directly from us,” he tweeted last Monday .
Shares recovered somewhat after that tweet. The stock has largely been on an upswing lately, and more than doubled its value in the past year.
Twitter is taking other steps besides account deletions to combat misuse of its service, working to rein in hate and abuse even as it tries to stay true to its roots as a bastion of free expression. Last fall, it vowed to crack down on hate speech and sexual harassment and CEO Jack Dorsey echoed the concerns of critics who said the company hasn’t done enough to curb such abuse.
Associated Press reporters Chad Day in Washington and Ryan Nakashima in Menlo Park, California, contributed to this story.
Opinion: State, Local Officials Declare War on Vacation
By Ross Marchand
As summer gets into full swing, Americans will scour the beaches in hope of some prime real estate for their sand castles and seagull snacks. But, every year, nearly half of Americans say they won’t be taking a summer vacation because of the high cost of travel.
The good news is that the increase in the number of online booking companies has led to more price competition among hotels and resorts. And, flexible booking arrangements are making travel more affordable. The increase in options and travel savings by websites has led to widespread consumer appreciation for booking websites, and much-needed vacations.
Despite a beneficial outcome for customers, online agencies and hotels, not everyone is pleased with the rise of internet booking platforms like Expedia or hotels.com. State and local officials in more than 30 states have sued online travel agencies (OTA) over their alleged refusal to pay their “fair share” of hotel occupancy taxes. They claim that, through loopholes, OTAs are able to lower their tax bill and exploit an artificial advantage over traditional travel agencies. Their proposed “fix,” however, would single out booking websites as the only service providers to pay occupancy taxes.
This unfair disadvantage is not only outside the scope of their service, it would mean higher prices for millions of customers relying on OTAs to book an inexpensive last-minute vacation.
The current debate over hotel occupancy taxes hinges on how exactly services should be taxed. Normally, if a customer goes directly to a hotel website and purchases a stay, they pay an occupancy tax assessed in the state and locality where the hotel is physically located. The hotel collects the tax from the customer, and in turn remits the tax to the government.
The situation gets a little more complicated, though, when OTAs enter the picture. Booking websites are often able to use their leverage to buy rooms from hotels at bargain rates, and sell the rooms to website visitors at a discount with a small service fee.
The online agencies basically “flip” the rooms and profit, even as the customer realizes savings and hotels get more exposure. Customers pay “tax” on the higher price that OTAs show on their websites, but OTAs only pass along part of that tax to hotels (who in turn pay the government).
These booking websites reasonably claim that, since they only paid a discounted rate for the hotel rooms, they should have to pass along only the tax on the bargain prices for said rooms. Any markup that the customers have to pay is the cost of the service that online agencies provide.
If a customer bought a hotel room directly from the hotel’s website and paid $100, that customer would have to pay the occupancy tax (let’s say 10 percent) on the amount. The $10 in tax would then go to the government via the hotel. On a site like Expedia, the online agency is the direct purchaser of the hotel room, and can get a $100 room for $90 due to their market sway. But because they bought the room for $90, they pay $9 in tax instead of the $10 normally paid by a customer in this situation.
Advocates of higher OTA taxation claim it’s unfair that websites pay lower occupancy taxes than customers would directly, but these websites are no different than middle men, buyers and procurers in other industries getting a better price for their customers. Paying for these procurement services is a separate issue from paying for the product being procured. Singling out OTAs for taxation, then, invites a double standard and opens the door to the taxation of more and more services.
Consider the case of other services that help customers navigate through markets. If a disabled individual cannot leave the house to go shopping, that individual may hire a shopper to procure products on his or her behalf. If this shopper has some savvy in coupon clipping and can acquire discounts, she will have a low final bill and a correspondingly-low sales tax bill. Even if the disabled client wouldn’t be able to secure the same discounts, the government wouldn’t force the shopper to pay sales tax on price without coupons. If any buyer obtains a discounted price, the government can only ask for sales tax on the discounted amount.
Online agencies accomplish what many traditional agents could not — supply lower prices and more options for cash- and time-strapped customers. Levying hundreds of millions of dollars in additional taxes on OTAs would inevitably be passed along to customers, making it more difficult to secure deals and rack up rewards points. By keeping taxation light and fair, states and localities could ensure that more and more Americans make it to the beach this summer.
ABOUT THE WRITER
Ross Marchand is the director of policy for the Taxpayers Protection Alliance. He wrote this for InsideSources.com.