Twitter reports loss of USD 645 million – changes imminent

Just three months after Twitter’s flotation on the New York Stock Exchange, the microblogging site has reported a net loss for 2013 totalling USD 645 million.

Yet the company’s recently published report also acknowledged that Twitter’s revenues had increased 110% from last year to reach USD 665 million.

In afterhours trading on Wednesday, shares fell as much as 12% as investors shown concern over another key factor in the report – the site’s slow growth in users.

Slow uptake

Twitter averaged 241 million monthly users in December last year, up from 232 at the end of September – meaning a growth of just 3.8%.

This is dramatically slower than the pace of growth in the beginning of 2013 (10%).

In addition, timeline refreshes were down. In the third quarter, people refreshed their feeds 685 times a month. In the last quarter, it was down 10% to 613 times – suggesting that users were not refreshing their timelines as often.

“If you don’t have an engaged user base, you don’t have a business,” notes Forrester analyst Nate Elliott.

“They have got to do better on users, that is the entire story.”

Advertising revenue growth

Dick Costolo told a group of Wall Street analysts and investors, “We simply need to make Twitter a better Twitter.”

The Chief Executive also said that Twitter has begun work on its web software – and the ease of use for new consumers wishing to sign up.

“Is your mom on Facebook?” asks Robert Peck, a SunTrust Robinson Humphrey analyst, answering: “Yes.”

“You ask that same question about Twitter, the answer is almost always no. The question is, Can [Twitter] ever become mainstream like Facebook is?”

But the messaging service’s sign up difficulties are not the only aspect getting a revamp.

Since the beginning, Twitter has focused on the sharing of text data between users and organisations.

But the popularity of services such as Snapchat may lead Twitter to improve its usability with regards to sending and receiving photos.

Costolo also stated the intent to improve how users find the information they want or need – perhaps heralding the development of a custom timeline.

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