A decrease in new users in Q4 blamed for weaker than expected figures for Twitter in 2015.
In a letter to shareholders, the company revealed the news that Q4 saw 305m new monthly active users (MAUs), down by 2m from the previous quarter.
The company claims that unreleased early year data demonstrates “a bounce back to Q3 levels” and are confident that “with disciplined execution, this growth trend will continue over time.”
The news saw Twitter share price drop over 10% in the markets on Wednesday.
Despite this setback, total revenue is up to $710m for Q4, an increase of 48% on the previous year. International revenue also saw a similar year-on-year increase of 51% to a total of $247m, and advertising revenue jumped 48% to $641m in total.
It all adds up to a complicated picture for the tech giant. Yet the news is not all negative. According to Associate Professor of Strategic Management, Dr Sotirios Paroutis, while not adding any active users in what historically has been Twitter’s weakest quarter is disappointing, it is worth noting that active advertisers have risen by nearly 90% each year.
Dr Paroutis also argues that the US elections and the Olympics are two big events in 2016 that Twitter will expect to help push their active users up, especially as one of Twitter’s more recent innovations is a greater focus on live events.
Yet Dr Paroutis notes the fine line which Twitter are trying to tread: “Twitter has delivered a number of product innovations, but these need to be less confusing for core users and attractive enough for new users.”
Dr Paroutis argues that if if Twitter are successful in keeping these two audiences on board while innovating through their coverage of live, high-profile events, it will make the platform “a more appealing option for advertisers [with a more] distinctive identity versus other social media offerings.”
