Investors no longer look forward to news on Twitter profit. Recently, the most popular social networking and microblogging service is suffering losses thus breeding discontent among investors. As of Q1 2014, the company lost $135 million, which is fivefold higher than last year. In the meantime, some data is promising. The quarterly revenues, for instance, grew by 119% to $250.5 million. According to the official statistics, 225 million people are active Twitter users. That number is 5.8% higher than in Q4 2013.
The mobile version of Twitter is in use by 198 million people; so, the indicator climbed 31%. Nevertheless, that statistics did impress neither investors nor the financial market. Hence, the Twitter stocks drifted lower by 10% trading below the IPO of $38.80 apiece. Company’s CEO Dick Costolo had better revive investors’ confidence in Twitter and prove that the trading 40% below the top price is temporary difficulties the formerly revolutionary project will be able to get through. The revenues generated by advertising directly depend on the audience. Therefore, the microblogging service is trying to change over to the multimedia format. In this case, Twitter will have to cooperate with such giants like Snapchat и Instagram.
“Wall Street is laser focused on that user number. For Twitter to maximize its value as an investment they need to get in front of as many people as possible and do a good job of monetizing that audience,” Thomas Forte, an analyst at Telsey Advisory Group in New York stated. It is important to keep in mind that Twitter competes with Facebook and Google in terms of mobile advertising. Late April, Twitter developers announced on creation of new types of advertisements designed to boost the number of downloads of its software. Such a strategy has already helped Facebook to raise its revenues from the mobile advertising.
