• by Sean Hargrave , Staff Writer, June 12, 2015

Dick Costolo stepping down as CEO is not the most surprising business news you're likely to hear this week. In terms of inevitability, it's right up there with shareholders protesting over Sir Martin Sorrell's pay packet at WPP and Greece having difficulty meeting its debt obligations.

But is it really all about numbers with Twitter? That's the way it has been portrayed in the UK press. For British broadsheets, Costolo paid the price of sluggish user growth that couldn't compete with the huge audience Facebook has attracted. There is some truth in this, but surely there's a far bigger picture. When Facebook announces figures, shareholders can see the dollar signs flash before their eyes as they fly by into their bank accounts. When Twitter does the same, all they can hope for is the elusive profit that they are always promised in the next quarter might actually happen.

There are only so many times a company's CEO can do this without ever producing a white rabbit from his hat to finally pacify investors. The latest figures were able to show the predicted 300m active monthly users -- but what they weren't able to show was the company's first profit since floating two years ago.

There are five questions that Twitter seriously needs to answer. 

1. Where are the ads?

Seriously, where are they? Is Twitter so frightened of alienating fans that it wants to keep revenue earning spots to a minimum? Sure, there are some promoted tweets and promoted "who to follow" (is it only me that gets upset with this not being "whom" to follow). Those long enough in the tooth to remember the early days of Google having the audacity to try to make money will remember that trendy digital types were up in arms and the same thing pretty much happened for Facebook. I'll leave you to ponder the wisdom of chasing nerds liking you over money in the bank.

2. What are you doing with nearly a $2bn income?

An interesting part of this whole debacle is that Twitter reaffirmed that it was likely to make a little under half a billion dollars in the next quarter. That would suggest that if all goes well, it's on course to have annual earnings approaching $2bn. Any company that is on a road to earning that level of income and can't turn a profit must surely need to look at its cost base to figure out where some fat can be trimmed from the bone. I'm no financial whiz kid, but if you're making well north of a billion dollars per year and you don't have hugely expensive raw ingredients, like unicorn tears of powdered dragon teeth, then you must surely be wondering where the money's going. 

3. Where's the mcommerce? 

Pinterest has a "Buy Now" button, so the people trying to sell items can offer frictionless payment without a shopper even needing to leave the app. Twitter is full of people trying to flog products and services -- why does it not have a similar feature? Even more surprisingly, its co-founder and chairman -- and now interim CEO, Jack Dorsey -- runs mobile payment company Square. Is there not a fit there? Surely?

4. When are the hard income decisions going to be made?

Like it or loathe it, Twitter is more of a broadcast medium than Facebook. So at some stage these people who are logging on to tell the world what they have to say, as well as occasionally hear what other have to say, need to be monetised. There are two obvious ways of doing this -- subscriptions or advertising -- or perhaps even both. Subscriptions could come in the form of professional accounts, like LinkedIn which offers premium access, or perhaps many tweets a day. Such a service might come with a set amount of daily promotion or perhaps matching users who don't know one another but would make a good fit -- perhaps an HR Director looking for a person with a skill set Twitter can see they have?

Charging everyone would almost certainly see a mass exodus -- but a professional account of some sort has to be at least attempted, doesn't it? As for advertising, well, I'm still stumped not to see an ad appear every, say, ten or dozen posts on my timeline.

5 Time to make money, not friends?

Trying to earn more through advertising or even pro accounts will undoubtedly annoy some loyal fans. There will be a lot of noise, but is anyone seriously going to drop their thousands of followers and start off on another platform? I seriously doubt it. It's nice to be the good guy set against a backdrop of Facebook and Google clawing in every dollar they can make, but if you're an investor, I think you'd like a little of that spirit to be injected into Twitter by the new CEO. Wouldn't you?