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If Twitter wants to be the global town square, it needs a few more people than its current 241 million users, Mike Isaac writes. Twitter reported earnings yesterday and while revenue per user is up, growth has slowed to a crawl. Twitter’s stock price fell to $50 from $65 on Thursday, despite the fact that earnings actually beat analysts’ expectations. Matt Lynley has a good overview of the earnings call and Quartz has all the earnings charts.
The problem is the service added 9 million users in the fourth quarter — up a mere 4% from the previous quarter. Only 1 million of those new users came in the US, where most of Twitter’s ad revenue comes from — up a mere 4% from the previous quarter. S&P Capital analyst Scott Kessler told Bloomberg that the slow growth calls into question Twitter’s future value to advertisers. On the earnings call, Twitter CEO Dick Costolo said the company as a growth plan, which mostly includes “making the site easier to use”, including adding richer media to the timeline and beefing up its messaging service.
Currently, Twitter doesn’t have a lot of value for people without a ton of followers, says tech consultant Rakesh Agrawal. In a post explaining why he himself loves Twitter, he explained why most people don’t: “The primary reason people in media love Twitter and splash their Twitter handles everywhere they can is that they get so much value out of it … But their readers and viewers don’t derive the same kind of value”.
While Twitter is figuring out how to grow, Facebook had a great quarter. Last week, the company announced it had revenues of almost $2.6 billion in the fourth quarter, up 63% from the same time last year. For the first time, more than half of Facebook’s revenue came from mobile. Vauhini Vara writes that Facebook’s success is largely because it “now has data that helps it prove to marketers that there is a specific—and significant—return on their investment in news-feed ads” — on desktop and mobile.
Despite Facebook’s trouble keeping teens around, Carnegie Mellon researcher Bruno Ribeiro just released a new model showing Facebook has staying power (so, too, does the service’s annoying emails about what your friends are up to).
Next, Facebook “is on the prowl for the next big smartphone app, whether it comes from inside the building or not”, says John Herrman. Late last year, he writes, the company spent $100 million on a little-known Israeli company, Onavo, which “had developed the only service that could identify, with precision, how many people were using almost any iOS app” — a feature neither Google nor Apple has. — Shane Ferro
On to today’s links: