Twitter has slowest user growth in recent history

Friday, 7 February 2014 01:09 - - {{hitsCtrl.values.hits}}

Reuters: Twitter Inc on Wednesday reported its slowest pace of user growth in recent company history, dimming hopes that the social media phenomenon can sustain its torrid pace of expansion and wiping out nearly a fifth of the company’s value in after-hours trading. The San Francisco company posted better-than-expected fourth-quarter revenue of $243 million in its first results as a public company. But investors focused on the anemic user growth, as well as a severe decline in timeline views, a measure of user engagement.

Twitter, which held a highly anticipated initial public offering in November at $26 a share, has divided investor opinion in recent months, as shares raced to more than $66 ahead of Wednesday’s results despite an absence of news. Twitter’s valuation has been predicated in part on the belief it could expand its mainstream appeal and eventually become as ubiquitous as Facebook Inc, which has five times as many users. Some analysts warned that its valuation looked increasingly bloated. User growth, a closely watched metric, in fact sputtered. Twitter averaged 241 million monthly users in the December quarter, up just 3.8% from the previous three months - the lowest rate of quarter-on-quarter growth since Twitter began disclosing user figures. Twitter’s user numbers grew at 10%, 7%, and 6% during the first three quarters of the year, respectively, before coming in at 3.8% for the final period. Perhaps most surprisingly, timeline views dropped sharply from 159 billion to 148 billion in the quarter, signaling that users were refreshing their Twitter accounts less often. Dick Costolo, the Twitter chief executive officer roundly celebrated just three months ago on Wall Street for pulling off a glitch-free IPO, found himself on Wednesday facing repeated questions from analysts about when Twitter’s user growth might reaccelerate.