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| Twitter shares drop on fears of 'stalling' growth | |
| (about 11 hours later) | |
| Twitter’s revenue soared in the first quarter of 2014, the company announced on Tuesday, but its growth appears to be stalling, and investors sent its shares sharply down in after-hours trading. | Twitter’s revenue soared in the first quarter of 2014, the company announced on Tuesday, but its growth appears to be stalling, and investors sent its shares sharply down in after-hours trading. |
| After the stock markets closed Twitter announced it had revenues of $250m for the first three months of the years, an increase of 119% year on year. Twitter announced a net loss of $132m for the quarter. | After the stock markets closed Twitter announced it had revenues of $250m for the first three months of the years, an increase of 119% year on year. Twitter announced a net loss of $132m for the quarter. |
| The revenue numbers comfortably beat analysts expectations of around $241m. The social media company’s shares, however, dropped over 10% shortly after the news was released as investors appeared disappointed with the 14m new users it attracted over the quarter, a growth rate of 5.8%. | The revenue numbers comfortably beat analysts expectations of around $241m. The social media company’s shares, however, dropped over 10% shortly after the news was released as investors appeared disappointed with the 14m new users it attracted over the quarter, a growth rate of 5.8%. |
| "We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth," said Dick Costolo, chief executive of Twitter. "We also continue to rapidly increase our reach and scale.” | "We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth," said Dick Costolo, chief executive of Twitter. "We also continue to rapidly increase our reach and scale.” |
| Costolo told analysts in the two days after the Oscars there had been 3.3bn views of tweets about the show. “There are few other companies with this kind of reach,” he said. “Twitter the platform we believe is already incredibly mainstream.” | Costolo told analysts in the two days after the Oscars there had been 3.3bn views of tweets about the show. “There are few other companies with this kind of reach,” he said. “Twitter the platform we believe is already incredibly mainstream.” |
| He said the Oscars example was a “tiny example of the ubiquity, the almost omnipresence, we have in the world to be in front of users.” | He said the Oscars example was a “tiny example of the ubiquity, the almost omnipresence, we have in the world to be in front of users.” |
| “Let me be clear I am really happy with engagement in Q1,” he said. | “Let me be clear I am really happy with engagement in Q1,” he said. |
| The company had a total of 255m monthly active users at the end of the quarter, up from 241m at the end of last year. The figure was better than the 9m it added in the last quarter of 2013, when the company grew at 3.8%. But it still represented slowing growth for the company and came as investors are increasingly focussed on the potential scale of Twitter’s business. | The company had a total of 255m monthly active users at the end of the quarter, up from 241m at the end of last year. The figure was better than the 9m it added in the last quarter of 2013, when the company grew at 3.8%. But it still represented slowing growth for the company and came as investors are increasingly focussed on the potential scale of Twitter’s business. |
| The social media company has established itself as a popular medium for celebrities, media outlets and brands but slower growth has triggered concerns on Wall Street that the service may lack the mass appeal needed to turn it into a advertising powerhouse. | The social media company has established itself as a popular medium for celebrities, media outlets and brands but slower growth has triggered concerns on Wall Street that the service may lack the mass appeal needed to turn it into a advertising powerhouse. |
| Twitter has made a series of changes to its service, making greater emphasis of pictures and video and changing profiles to more closely resemble those of Facebook. Costolo said the number of tweets people had added to their favourites or re-tweeted were up 26%. He said he was “confident” that the changes and more would drive up growth and usage of the service. | Twitter has made a series of changes to its service, making greater emphasis of pictures and video and changing profiles to more closely resemble those of Facebook. Costolo said the number of tweets people had added to their favourites or re-tweeted were up 26%. He said he was “confident” that the changes and more would drive up growth and usage of the service. |
| Timeline views, Twitter’s measure of how many times a user refreshes a page on the desktop or a mobile device, increased 15% year-over-year to 157bn, up from 149bn last quarter but still below the 159bn it reported last year. | Timeline views, Twitter’s measure of how many times a user refreshes a page on the desktop or a mobile device, increased 15% year-over-year to 157bn, up from 149bn last quarter but still below the 159bn it reported last year. |
| Twitter’s results followed criticism from NBC Universal’s head of research, Alan Wurtzel, who told The Financial Times over the weekend that there was no evidence for the social media firm’s claims that it was driving TV audiences. “It just isn’t true”, Wurtzel told the Financial Times. “I am saying the emperor wears no clothes. It is what it is. These are the numbers.” | Twitter’s results followed criticism from NBC Universal’s head of research, Alan Wurtzel, who told The Financial Times over the weekend that there was no evidence for the social media firm’s claims that it was driving TV audiences. “It just isn’t true”, Wurtzel told the Financial Times. “I am saying the emperor wears no clothes. It is what it is. These are the numbers.” |
| Asked about the comments Costolo said Twitter’s interest in TV was “very much based on data we saw informing the two-way relationship”. He cited numerous studies he said showed a close relationship between Twitter and TV usage. | Asked about the comments Costolo said Twitter’s interest in TV was “very much based on data we saw informing the two-way relationship”. He cited numerous studies he said showed a close relationship between Twitter and TV usage. |
| Twitter is not alone in facing slowing growth problems. The pace at which Facebook adds accounts too appears to have run out of steam. But the largest social network now counts over 1bn people as monthly active users. At 255m, Twitter is in danger of being caught by the fast growing, and Facebook-owned Instagram, and is just over half as big as WhatsApp, the private social messaging service also owned by Facebook. | Twitter is not alone in facing slowing growth problems. The pace at which Facebook adds accounts too appears to have run out of steam. But the largest social network now counts over 1bn people as monthly active users. At 255m, Twitter is in danger of being caught by the fast growing, and Facebook-owned Instagram, and is just over half as big as WhatsApp, the private social messaging service also owned by Facebook. |
| Nate Elliott, analyst at Forrester Research, said users growth and “engagement” –the amount of time they spend on Twitter and tweets they send, retweet and favourite, were far more important to investors and advertisers than revenues at present. “If you don’t have an audience, you don’t have a business,” he said. | Nate Elliott, analyst at Forrester Research, said users growth and “engagement” –the amount of time they spend on Twitter and tweets they send, retweet and favourite, were far more important to investors and advertisers than revenues at present. “If you don’t have an audience, you don’t have a business,” he said. |