Could Twitter’s stunted growth prospects scare off investors?

Twitter announced Thursday that it has filed for its IPO and already there are concerns about its growth.

The San Francisco-based company is generally regarded as one of the top social networks, behind only Facebook in popularity. But when you compare the number of monthly active users between the two social networks, Twitter is nearly 1 billion users behind Facebook.

In December, Twitter announced that it had more than 200 million monthly active users, and it hasn’t made any other announcements since then.

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This could be a strong point for Twitter if analysts see it as meaning that there is still a lot of room for growth, but reports Friday say Twitter has struggled to grow since then.

According to AllThingsD, unnamed sources familiar with Twitter say the company has grown by only about 40 million monthly active users since December. At this pace, Twitter would cap 2013 with 260 million monthly active users.

Not only does that appear to be very slow growth, it also seems to be way off of what Chief Executive Dick Costolo had hoped Twitter would reach. According to AllThingsD, Costolo told staffers that he expected the company to double its monthly active users base and reach the 400 million mark.

Twitter declined to comment for this article since it is in its quiet period, but if the report is right, Twitter’s ability (or lack thereof) to grow may be a big concern once the company starts pitching to investors and analysts.

So why is Twitter having a hard time growing when Facebook and other social networks seem to grow by the dozens every couple of months? Well unlike other social networks that are straightforward and easy to use, Twitter can be hard for newcomers to understand.

For example, many first-time users don’t understand that “RT” means “retweet.” Also, a “.” in front of another users handle at the front of a post helps broadcast the tweet to more users, and “h/t” stands for “heard through” and means the same thing as “via.” The frequent use of hashtags can also scare off new users who don’t understand exactly what hashtags are supposed to do.

Not only is the jargon confusing but even following a conversation on Twitter can be tough. That’s why Twitter recently introduced a new blue line feature that strings together tweets that are all part of the same conversation. Although many heavy Twitter users voiced their dislike for the feature, it has likely helped Twitter ease in newer users.

Twitter will likely have to continue to simplify its service if it wants more users to stick around.

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