Home  › Social › Social Media
Twitter Money

Losses Mount for Twitter as Usage Slows

  |  February 6, 2014   |  Comments

Twitter’s market cap fell back to earth this morning, shedding more than 21 percent of its value on the heels of a $511 million net loss. Meanwhile, ad revenue per thousand timeline views grew by 76 percent.

Twitter’s market cap fell back to earth this morning, shedding more than 21 percent of its value on the heels of a $511 million net loss in the previous quarter. The company’s 116 percent year-over-year increase in revenue to the tune of $243 million was no match to Twitter’s massive expenditures in sales, marketing, and research and development. Losses surpassed half a billion dollars from $8.7 million in the year-ago quarter.

The bulk of Twitter’s revenue, or $220 million, was derived from a 121 percent year-over-year increase in advertising. While Facebook was applauded for earning more than half of its revenue from mobile in the previous quarter, Twitter is already pulling in more than 75 percent of its revenue from mobile.

Elsewhere for Twitter though, cracks are beginning to show on the surface. The platform’s total average monthly active user base jumped less than 4 percent to 241 million during the quarter, marking the lowest quarterly gain in users since the company began disclosing those numbers. Average monthly active users were up 30 percent from the year-ago period, however.

Timeline views fell for the first time from the previous quarter’s 159 billion to 148 billion, but Twitter still managed to net a 26 percent year-over-year increase. Mobile monthly active users jumped 37 percent from the year-ago quarter to 184 million.

Meanwhile, advertising revenue per thousand timeline views — a top benchmark by which Twitter gauges the growth of its business — grew 76 percent from the year-ago period to $1.49 in the final quarter of 2013. Favorites and retweets were up 35 percent from the previous quarter while direct messages jumped 25 percent in the same period, according to Twitter.

“Twitter is the only platform that is simultaneously public, real time, conversational and widely distributed,” Dick Costolo, chief executive of Twitter, says on the earnings call with investors and analysts. “We believe those four pillars are the right four pillars to help us reach every connected person on the planet.”

Indeed, Costolo spent much of the call answering questions about how Twitter plans to gain more users and increase engagement. Twitter’s roadmap calls for improvements across those four pillars he cited, including the user experience for new users especially on mobile, deeper integration of rich media, making Twitter a better tool for public and private conversations, and finally better organizing content along topical and relevance lines.

“We don’t think we need to change anything about the characteristics of our platform. We simply need to make Twitter a better Twitter,” Costolo says. “Those additive changes over the course of the year… will start to change the slope of that growth curve going forward.”

Costolo ended Twitter’s first earnings call by highlighting the key attributes that are unique to Twitter and discussing the overall strengths of native ads on mobile.

“We’re the place that information breaks first. We’re the place that real-time discovery of content happens. We’re the place that exists as the consummate second screen, both for the TV and any experience that’s happening in the world, and no other service can say that,” he tells analysts.

“In the mobile world, that display ad can no longer be an interruption through which a marketer tries to communicate more loudly than the content on the screen. That advertisement has to be content that’s relevant for the user,” Costolo says. “The ads perform better when they’re content first… That combination of the native ad unit and true one-to-one marketing that’s amplified has just made the ads better in this environment.”

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Matt Kapko

Matt Kapko has been writing about mobile since 2006, before it became cool. Based in Long Beach, CA, he has covered mobile entertainment, digital media, marketing, and advertising for several business media outlets. A former editor and reporter for RCR Wireless News, paidContent, and iMedia Connection, Matt is a regular freelance reporter for ClickZ. You can follow Matt on Twitter at @MattKapko or drop him a line at matt@kapko.co.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Social newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...