Tomahawk, WI 10/28/2014 (Basicsmedia) – Slowing user growth at Twitter Inc. (NYSE:TWTR) continues to be a point of concern even as the company beat estimates in the third quarter generating $361 million in revenue. During an interview on CNBC, Jackdaw research chief analyst, Jan Dawson, argued that Twitter should focus on monetizing people who haven’t joined the platform.
Active members on Twitter Inc. (NYSE:TWTR) was up by 23% to highs of 284 million in the quarter but slightly lower compared to a 24% increase in the second quarter.
“The levers for future growth just don’t seem to be moving in the right direction at least not fast enough. The user’s growth they haven’t added this few with the exception of one-quarter since 2010. […] It is really not clear how big that base of logged out users is. They won’t give us the metrics on that, and it is also not clear how they are going to monetize it when they know so little about this people,” said Mr. Dawson.
Twitter Inc. (NYSE:TWTR) worry at the moment is that despite the number of active users increasing, the amount of time that users spend on the network has been declining. U.S users lead the pack on a decline in the time that people spend on the network.
One positive thing coming out of Twitter Inc. (NYSE:TWTR) is that its ad revenue has been increasing as a result of an increase in earnings per timeline view. Twitter will have to identify new user’s likings as well as gathering information about their demographics so that they can become more appealing to advertisers.
Twitter Inc. (NYSE:TWTR) should not be compared to Facebook Inc (NASDAQ:FB) according to Mr. Dawson as it has grown to be a force to reckon with, over a short period.
“The problem with Twitter Inc. (NYSE:TWTR) is they always get compared unfavorably to Facebook which has well over 1 billion monthly active users at this point and you know Twitter less than 300 million seems a lot smaller,” said Mr. Dawson.