Vunderkind
Social Member
Social media microblogging website, Twitter, has released a report indicating a net loss of $645m for 2013, which is just three months after its stocks went public at the New York Stock Exchange.
The loss was predicted by analysts, who highlighted Twitter’s revenues, which rose by 110% in 2013 to reach $665m.
However, investors are concerned with the slow growth in Twitter’s user base. It is a far greater concern, for that matter, than the net loss of $645m.
In the last quarter of 2013, Twitter reached an average of 241 million monthly users, which is an increase by just 3.8% from the previous quarter.
Comparing that percentage with the percentage increase of users at the beginning of 2013 (10%), this is a slowdown.
Timeline views also dropped by 7% last year, suggesting that Twitter users were refreshing their feeds less often than before.
Arvind Bhatia, an analyst at Sterne, Agee and Leach says, "What this report will do is it will question how mainstream is Twitter as a platform.”
Twitter’s share also fell by as much as 12% in Wednesday’s after-hours trading.
Stuart Miles, CEO and founder of Pocket-lint.com explains that Twitter is a hard-to-understand website for first-time users, and that is the main reason for the slow growth. He gave an example using Satya Nadella, Microsoft’s new CEO. "Apart from professionals like journalists, the typical user gets on to Twitter, messes around, doesn't quite get it, leaves it a while and then comes back a year or two later. But that translates into very slow growth.
"The classic example of this is Satya Nadella, the new head of Microsoft. He used Twitter in 2010, then gave up for four years, and now is using it because he thinks it's the way to communicate now he's the chief executive," he said.
An analyst at Forrester, Nate Elliott told AFP: "If you don't have an engaged user base, you don't have a business. They have got to do better on users, that is the entire story."
We noticed that Twitter has revamped its web page and is rolling out several updates to its Twitter app on app stores. Might it just be that people just don’t get Twitter? Is Twitter just too complicated for effective integration of its business model? Also, might it already be too late for Twitter to make drastic changes in a stab at simplicity?