Twitter’s stock is dropping as they have been unable to entice new users or keep their current users coming back at the same rates as before.
Twitter CEO Dick Costolo has been making improvements, but the tweaks don’t seem to be enough to create meaningful change because Wall Street has grown weary of the slow pace. The company’s stock dropped 11% on Monday after Twitter released its third quarter report, which showed meager growth.
“We have to continue to grow our monthly active users and make it increasingly a daily use case for them,” Costolo said during a webcast with investors to discuss the financial results. “It’s more critical than ever to increase our overall pace of execution.”
In an interview, Costolo emphasized that his company is trying to cater to three distinct audiences: the daily Twitter user, the casual visitor, and the reader who only views a tweet that has been embedded in an article or an app. “You want to create scalable experiences that work for all kinds of different users,” he said.
In Twitter’s financial report, it said that the number of people who signed in at least once a month went up by 4.8% in the third quarter. However, it attracted fewer new users than in the previous two quarters. Regular Twitter users also seem to have a waning interest in the platform as they used it less frequently on average than during the last quarter.
Thus far, Twitter’s effort to stay afloat, which has included an easier sign-up for new users and a better organization for tweets about major events, has yielded unsatisfactory results. Nate Elliott, an analyst a Forrester who studies social media, believes that Twitter needs to take a cue from Facebook and be more aggressive about improving user experience. “Facebook is constantly looking for ways to get people back on their site,” he said.
By contrast, Twitter’s revenue increased sharply in the third quarter. Their revenue, most of which is derived from advertisements, more than doubled to $361.3 million compared to $168.6 million a year ago. However, Twitter is still losing money due to the hundreds of millions it spends on stock compensations for its ever expanding workforce.
[Source: New York Times]