Twitter disappoints again on user growth and views; shares drop

SAN FRANCISCO Tue Apr 29, 2014 7:53pm EDT

1 of 2. The Twitter logo is pictured at its headquarters on Market Street in San Francisco, California April 29, 2014.

Credit: Reuters/Robert Galbraith

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SAN FRANCISCO (Reuters) - Twitter Inc on Tuesday reported 255 million monthly active users, up 5.8 percent from the previous quarter but not enough to satisfy investors increasingly concerned about its struggle to gain a mass following.

Twitter's stock fell nearly 10 percent after hours, to below its post-initial public offering low of $38.80 on November 25.

The San Francisco-based company also said viewers refreshed their "timelines" - Twitter's equivalent of Web page views - 157 billion times in the first quarter, slightly fewer than some analysts' estimates.

The results revealed slowing momentum at a company that exuberant investors had once argued could match Facebook Inc's scale. At its peak in December, Twitter enjoyed a $46 billion market capitalization on just $665 million of revenue in 2013, making it one of the world's priciest stocks.

But cracks began to show in February, when Twitter Chief Executive Dick Costolo pledged to revive user growth after disclosing the rate had fallen to its lowest in years. Since then, Twitter's stock has been trading at 40 percent below its peak.

Expectations of Twitter growing into a communications utility that Facebook has become are "unrealistic and divorced from reality," said Brian Wieser, an analyst at Pivotal Research. "Twitter is and will remain a niche medium, and a very powerful one."

The company, which has been steadily refining its targeting capabilities, shows signs that it is better able to present ads based on what it thinks each user would be interested in.

Twitter said its advertising revenue per thousand timeline views, a metric that measures the effectiveness of its ads, nearly doubled to $1.44.

The company posted better-than-expected quarterly revenue of $250 million, as its mobile ads drew more viewer responses.

Excluding certain items, Twitter broke even against Wall Street expectations of a 3 cent per share loss. But the company said its net loss in absolute terms widened nearly fivefold to $132 million from $27 million a year ago.

(Reporting by Gerry Shih; Editing by David Gregorio and Richard Chang)

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Comments (2)
AlkalineState wrote:
Just because there are people signed up for twitter, it does not mean they read it or care about it. “Follower” is another word for a person with a bunch of junk mail and posts they don’t read.

Twitter is the new groupon. Trying to convince investors and advertisers that they have eyeballs and real users they don’t really have. “Give us ten million dollars and we’ll get you on every spam list in Eastern Oklahoma.” Yay?

Apr 29, 2014 5:24pm EDT  --  Report as abuse
dd606 wrote:
Most likely because people have spent more time on Reddit. And then, some other site will come along and be the new hip thing, and people will flock to that… and so on and so on. Which is why these are crappy things to invest in… even medium-term.

Apr 29, 2014 7:46pm EDT  --  Report as abuse
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