News from Twitter's (
) second earnings report as a public company has been met with
mixed results from investors. Sales doubled to $250.5 million
year over year, more than Wall Street analysts expected. Twitter
continues to lose money, incurring a 22 cent loss per share.
Despite the increase in ad sales, Twitter (
) reported a reduction in engagement metrics. Twitter reported
255 million monthly active users for Q1 2014, a 5.8% increase
over last quarter. This falls slightly below analysts'
expectations. Wall Street analysts remained worried about
Twitter's slow growth because such a large percentage of revenue
comes from ad sales. On the earnings call Twitter CEO Dick
Costolo was positive about engagement in Q1. Favorites and
retweets were up 26% in the quarter. A sign, Costolo says, people
are getting more use out of Twitter.
Even with the higher than expected sales revenue, Twitter
investors have reason to worry. There is a growing concern among
content producers that social engagement on Twitter and Facebook
is not as effective as they had thought. In January, Upworthy.com
announced they would no longer be using social engagement and
page views to measure success. Tony Haile, the CEO of real time
traffic tool ChartBeats, has said that they see no correlation
between social engagement and web traffic.
As websites and advertisers begin to see that social
engagement and page views do not increase revenue, Twitter,
), Linkedin (
) and Yelp (
) will have an even harder time selling ad revenue.
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