Twitter user growth lags despite effort to drum up interest
Despite tweaks to its micro-blogging service intended to win over new users, Twitter Inc. recorded just a slight increase in user growth in the second quarter.
The San Francisco company Tuesday reported an average of 313 million monthly active users, up just 3% from the same quarter in 2015.
Since co-founder Jack Dorsey returned as chief executive a year ago, the company has sought make itself more appealing to nonusers. It has strayed away from a purely chronological timeline, upped the amount of streaming video on its platform and eased its 140-character cap on messages by omitting usernames and links from the count.
But those changes haven’t resulted in a surge in new users — and they haven’t appeased investors.
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The social media firm reported earnings of $0.13 a share on revenue of $602 million, up 20% from the same quarter last year. But Twitter missed revenue predictions of $607 million for the quarter and issued an outlook for the third quarter well below analysts’ expectations — sending the stock tumbling 11% in after-hours trading to $16.39.
Twitter has sought to differentiate itself from other social networks by establishing its fast-moving platform as a destination for real-time events. To build off that strength, it has signed multiple deals with sports leagues and TV stations to live-stream games and events.
On a call with investors, Twitter Chief Financial Officer Anthony Noto and Chief Operating Officer Adam Bain suggested that strategy would pay off later in the year. With high-profile events such as the Olympics, the election and the NFL season still on deck, Twitter is in position to boost advertising revenue, they said.
But analyst Michael Pachter of Wedbush Securities questioned whether Twitter’s content strategy will persuade new visitors to create accounts.
“The NFL has broad appeal to millions of people who don’t use Twitter, [but] what good does the NFL do them” if they don’t sign up, Pachter said.
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