Despite growth in revenue Twitter’s shares have dropped 7% as a result of stalling usage.
On Monday, Twitter reported a decline in timeline views per user; this is a key measure of user engagement and has caused a decrease in the value of its stock. This might come as a surprise having in mind that both the number of users and the income have grown.
The total number of users has risen 23% and reached 284 million, and the revenue, which mostly comes from ads, has doubled in this year’s third quarter, now reaching $361 million, from last year’s $168.6 million. This is partly due to Twitter’s efforts to innovate new revenue sources. The company has started offering marketers the ability to buy ads inside the mobile apps of other companies and video ads.
According to Reuters, Twitter’s projected revenue hasn’t met some investor’s optimistic expectations of $440 million to $450 million, but it did exceeded Wall Street’s projection of $352 million. Last year Twitter’s loss in the third quarter was $64.6 million, one year later the loss has grown to $175 million.
Twitter’s CEO Dick Costolo has expressed confidence despite the negative indicators saying “I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”
Twitter simplified the sign-up process in order to attract new users and they’ve also improved the organization of tweets about big events like the NFL’s season and the World Cup to retain existing users. So far, it seems, these efforts have not yielded the desired results.
Mr. Costolo also added that Twitter caters to three different segments among their audience; the daily user, the casual visitor and the person who views tweets embedded in third party news articles or apps. He announced that in the future Twitter would find ways to make money from casual visitors and those who see tweets on other platforms.
There’s a lot going on in and around Tweeter, and the future will show whether it thrives or fails.
Also read: Twitter Could Double Its Revenue By 2017
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