Twitter chief positive but market sees deep flaws in platform’s performance

Despite a rise in revenue and user numbers, social media platform Twitter’s share price has slumped following the release of its most recent quarterly report.

A $US132.4 million ($A142.7m) loss in its January to March 2014 quarter earnings was offset by a 119% rise in revenue over the quarter to $US250 million, up from $US114 million in the first quarter of 2013.

Twitter user numbers also rose, with user numbers up 5% to 225 million from 241 million at the end of 2013.

Twitter chief executive Dick Costolo put a positive spin on the results, saying the company had recorded a strong first quarter result for 2014.

“Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth,” Costolo said in a statement.

Costolo said the continued growth in mobile users and the advertising revenue generated by mobile user growth showed Twitter was on the right track.

“We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising.”

But some analysts failed to share Costolo’s bright assessment, with many pointing to poor user engagement and advertising per timeline view figures as indicative of Twitter’s struggle to fully monetise its platform.

Speaking to UK news site The Telegraph, Chris Beauchamp, market analyst at IG, was blunt in his appraisal of Twitter’s performance.

“Although it made a profit last quarter, Twitter’s income was so small as to be barely noticeable,” Beauchamp said.

“Twitter’s user growth appears to be slowing too, which means fewer people seeing the ads that actually appear on the platform. If the global marketplace for advertising begins to consolidate, major players will focus on big platforms like Facebook, leaving Twitter out in the cold.”