TWITTER STRUGGLING TO FLY

Q2 net loss widens to US$116m while active users base stagnates at 328m

TWITTER shares were hammered on Thursday after the company reported no gain in its user base in the past quarter, raising fresh fears about the future of the service as it loses more ground to Facebook.

Twitter, which has been struggling to keep pace in the fastmoving world of social media, reported a net loss of US$116 million (RM496.58 million) in the second quarter, slightly wider than its US$107 million loss a year ago.

More significantly, Twitter reported its base of monthly active users was unchanged at 328 million compared to the first three months of the year and up just five per cent from a year earlier.

Twitter said revenues in the quarter slipped five per cent from a year ago to US$574 million, and advertising revenue fell eight per cent to US$489 million.

Shares in Twitter sank 14.1 per cent to close at US$16.84.

Twitter’s results came in sharp contrast with those of Facebook a day earlier. The world’s leading social network reported a 71 per cent jump in profits to US$3.9 billion, fuelled by growth in ads delivered to its more than two billion users worldwide.

Analyst Trip Chowdhry at Global Equities Research said Twitter’s “fundamentals are broken” and reiterated his view that it was on a downward spiral that would cost advertising revenue.

He expected Twitter shares to sink to US$10 or less, saying the company lacked mass market appeal and was “trading on entertainers and politicians”.

As Twitter’s growth has stalled, Facebook has been gaining new users for its main social network as well as Instagram, the social network focused on images and video.

Facebook hauled in some US$9 billion in revenue in the past quarter, mostly from advertising delivered via mobile devices.

Twitter, which has never delivered a profit, said it was making progress on improving its product, in the expectation this would boost growth and help it move to profitability.

“We have developed what we believe are steady, stable and sustainable engines of growth,” Twitter chief executive Jack Dorsey told a conference call.

“Twitter is what’s happening in the world and what people are talking about.”

Dorsey said Twitter was focusing on the metric of “daily active users” rather than the more closely watched monthly figure, and said daily usage was up 12 per cent, without offering a specific number. AFP