Twitter users, engagement disappoint; shares dive

Oct 28, 2014, 7:24 AM EDT
The silhouettes of employees are seen beneath the Twitter Inc. logo in the cafeteria area of the company's headquarters in San Francisco, California, U.S., on Friday, Sept. 19, 2014. Twitter Inc. raised $1.8 billion after boosting its first-ever debt offering, selling notes that owners can convert into the microblogger's stock at a price that was 47 percent above closing level.
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Twitter Inc posted a disappointing 7 percent slide in a closely watched measure of engagement even though its user base grew 23 percent in the third quarter, triggering a more than 9 percent decline in its stock on Monday. Reuters reports:

The online messaging service also projected fourth-quarter revenue that may miss Wall Street's targets. Expectations had run high for Twitter since the messaging service, which for years had fought to revive growth in users, surprised Wall Street in the second quarter by signing up 24 percent more people globally.

Excluding Monday's decline, Twitter's shares have gained almost 19 percent since July. Some investors had raised fears about declining Twitter usage as other social media and mobile messaging services become more popular.

The company reported monthly active users, an important metric scrutinized by investors who worry that Twitter's growth has peaked, rose 23 percent to 284 million in the quarter.

That was down slightly from 24 percent in the previous three months, when the World Cup helped drive traffic to the service, and remains well behind Facebook's Inc's community of more than a billion people.

Meanwhile, Twitter has no short-term plans to monetize Vine, a social product that it purchased in its infancy. TechCrunch reports:

The information was shared during the company’s earnings call, following a quarterly financial report that included stronger-than-expected third-quarter performance but soft guidance and user growth that investors found troubling.

Twitter CEO Dick Costolo said that his “immediate term and immediate focus on Vine are continuing to build beautiful content-creation tools for all of the users of that service.” It will eventually, of course, but not for some time it seems.

TAGS: Twitter