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Twitter now has a problem thatís way worse than slow user growth

Twitter now has a problem thatís way worse than slow user growthTwitter reported yesterday no growth in new monthly active users in the holiday quarter from the prior quarter. The company ended 2015 with 320 million monthly active users. Those numbers are disappointing in themselves.

But when you take a closer look, itís far worse than that. Last April, the San Francisco company said it would change the way it calculates monthly active users, including what it calls ďSMS Fast Followers,Ē or people who access the social network entirely via text message. When you exclude these SMS users, Twitter actually saw negative user growth, ending the fourth quarter with 305 million monthly active usersó2 million fewer than the third quarter. In its shareholder letter, the company noted that in January its monthly active user numbers did ďbounce back to Q3 levels.Ē
Twitter now has a problem thatís way worse than slow user growth

Investors were clearly not happy with the lack of progress. Shortly after the earnings release, Twitter shares momentarily plummeted 12%. The price rebounded as investors digested the news.
Twitter now has a problem thatís way worse than slow user growth

In the fourth quarter, Twitter narrowed its net losses, which totaled $90 million, by 28% year over year. It generated $710.5 million in revenue, up 48% from the year-ago period.

Including SMS users helped Twitter obscure its slowóand now negativeógrowth, but the companyís coming to the realization itís only complicating matters. In its shareholder letter, the company said it would stop counting SMS Fast Followers in its MAU calculations. SMS Fast Followers, however, will be factored into its total audience count, which also includes its logged-out users, or those who visit Twitter without signing up for or logging into their accounts. Twitter said its total audience comprised more than 800 million visitors in the fourth quarter.

Source: Quartz
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