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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. Twitterâ€™s stock price fell to $50 from $65 on Thursday, despite the fact that earnings actually beat analystsâ€™ 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 â€” up a mere 4% from the previous quarter. Only 1 million of those new users came in the US, where most of Twitter’sÂ ad revenue comes from â€”Â up a mere 4% from the previous quarter. S&P Capital analyst Scott Kessler told Bloomberg that the slow growth calls into question Twitterâ€™s future value to advertisers. On the earnings call, Twitter CEO Dick Costolo said the company as a growth plan, which mostly includes â€śmaking the site easier to useâ€ť, including adding richer media to the timeline and beefing up its messaging service.
Currently, Twitter doesnâ€™t have a lot of value for people without a ton of followers, says tech consultant Rakesh Agrawal.Â In a post explaining why he himself loves Twitter, he explained why most people donâ€™t: â€śThe 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 â€¦ But their readers and viewers donâ€™t derive the same kind of valueâ€ť.
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 Facebookâ€™s revenue came from mobile. Vauhini Vara writes that Facebookâ€™s success is largely because it â€śnow has data that helps it prove to marketers that there is a specificâ€”and significantâ€”return on their investment in news-feed adsâ€ť â€” on desktop and mobile.
Despite Facebookâ€™s trouble keeping teens around, Carnegie Mellon researcher Bruno Ribeiro just released a new model showing Facebook has staying power (so, too, does the serviceâ€™s annoying emails about what your friends are up to).
Next, Facebook â€śis on the prowl for the next big smartphone app, whether it comes from inside the building or notâ€ť, says John Herrman. Late last year, he writes, the company spent $100 million on a little-known Israeli company, Onavo, which â€śhad developed the only service that could identify, with precision, how many people were using almost any iOS appâ€ť â€” a feature neither Google nor Apple has. — Shane Ferro
On to todayâ€™s links: