Wall Street was not optimistic about Twitter or Snap, owing to the former’s acquisition saga and the latter’s previously disclosed revenue miss. The most recent results were still disappointing, pointing to a potentially bleak run of tech earnings for a category that has had a difficult year so far.

While the mood soured in Q2, the period was not without incident. During an ugly spat with Musk, Twitter became a public spectacle. The Tesla founder announced his intention to acquire Twitter for $44 billion earlier this year, but in July officially tried to back out of the deal, citing concerns about how the platform tracks bot and spam accounts. Twitter has since sued Musk in an attempt to compel him to complete the acquisition for the agreed-upon price, with a trial scheduled for October. According to the company, the deal’s uncertainty impacted revenue in the second quarter. There was no conference call to discuss the results. Twitter’s advertising revenue increased by 2% year on year to $1.08 billion.

“[In] some industries where top-line growth may remain strong but the businesses are experiencing input cost pressure due to inflation, we’ve observed reduced marketing spending and lower bids per auction,” Snap finance chief Derek Anderson said on a call discussing the results with analysts.

The pullback has also sharpened a sense of competition, as marketers spend less in fewer places. 

“[Competition], whether it’s with TikTok or any of the other very large, sophisticated players in this space, has only intensified,” said Anderson in response to an analyst question. 

Snap will increase its investment in three areas to re-ignite growth: products and platforms, direct-response advertising, and the search for new revenue sources. Spotlight, a TikTok-like feature, saw total time spent with its content increase by 59 percent year on year in Q2, according to the earnings release. Snapchat+, a web version and paid subscription plan, was also recently launched. Twitter’s future is unclear as it awaits a decision in the Musk case.

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