Twitter user growth stalls in fourth quarter of 2015

Twitter’s average monthly active users stalled in the fourth quarter of 2015 — the first flat quarter sequentially since the company listed in 2013.

The news last night sent Twitter shares falling 6.6% in after-hours trading, after the social media company’s revenue forecast for the current quarter missed analysts’ expectations.

The weak results will stoke investor concerns over the company’s stalling growth and the effectiveness of chief executive Jack Dorsey’s turnaround strategy.

The company’s shares have more than halved in value since Mr Dorsey, one of the founders, returned to Twitter in July.

The microblogging service forecast first-quarter revenue of between $595m and $610m, well below the average analyst estimate of $627.1m.

Twitter said in a filing it had 320m average monthly active users in the quarter, unchanged from the third quarters.

The company, facing slowing user growth, has been experimenting under Mr Dorsey, who became interim CEO in July and then CEO in October, to make its website more engaging.

Twitter made a dramatic product change earlier in the day, saying it will recast the way it displays tweets on its home page — customising them to individual users.

The change to the timeline on the home page is designed to appeal to advertisers by giving more prominence to tweets that advertisers pay for.

But some analysts have said that the earlier efforts including Moments, which showcases Twitter’s best tweets and content, have not taken off.

An exodus of some top executives last month added to investor concerns about the company’s ability to reignite stalled growth.

Revenue rose 48.3% to $710.5m in the quarter ended December 31.

Twitter’s net loss shrank to $90.2m, or 13 cents per share, in the fourth quarter ended December 31 from $125.4m, or 20 cents per share, a year earlier. Excluding items, it earned 16 cents per share.

Analysts had expected a profit of 12 cents per share on revenue of $709.9m.

Reports that Twitter could be changing the timeline surfaced last week, prompting laments by users tweeting with the hashtag #RIPTwitter.

They said using a customised, or algorithmic, timeline, similar to Facebook’s News Feed, meant Twitter would lose one of its signature features.

The move to have tweets paid for by advertisers surface higher in individuals’ timelines is expected to make it more likely users will respond to ads.

Mr Dorsey tried to reassure users in a series of tweets last week that Twitter would remain the place for live news and commentary.

“Twitter is real-time. Twitter is about who & what you follow. And Twitter is here to stay! By becoming more Twitter-y,” Dorsey wrote.

“We’re going to continue to refine it to make Twitter feel more, not less, live!”

Twitter's stocks plummet, lost 2 million active users this quarter, stocks show https://t.co/OIdABLKcSs pic.twitter.com/YzhYyNTrh1

— New York Daily News (@NYDailyNews) February 10, 2016