Twitter continued to battle slowing growth in its core users in the fourth quarter, as the social network promised to change broken, confusing elements that are driving users away.
Shares tanked as much as 10 percent immediately after the report was released, then backtracked some of the decline to trade about 6.2 percent lower at $14.15 in recent after-hours trading.
Twitter has been plagued by questions about its growth since its debut as a public company. The social network faces the conundrum that its quirky elements, like character-count limits and real-time feeds, are what its adherents treasure most but make Twitter unwelcoming for new members. Its slowing user growth raised doubts about Twitter’s ability to recruit and keep a mass following, leading to the ouster of ex-CEO Dick Costolo last year and return of founder Jack Dorsey to the helm in October.
Dorsey’s tenure has been bumpy, too. Growth continued to peter, and last month he oversaw the exodus of five top executives, indicating product changes that could make the service more friendlier may be delayed.
Wednesday, the company said that people who sign into the service on the Web or its mobile application at least once a month rose to 305 million, up 6 percent from a year earlier. It’s the lowest year-on-year growth its reported as a public company, and it represents a drop in members from the third quarter.
Compare that to larger rival Facebook. Last month, that social network said 200 million more people visited its sites at least once a month versus a year earlier, bringing its total to 1.59 billion.
In a letter to shareholders, Twitter said that despite a quarter-on-quarter decline in monthly active visitors, performance in January has bounced back to levels in the third quarter. “We’re confident that, with disciplined execution, this growth trend will continue over time,” the company said.
The company alluded to Facebook’s dominance Wednesday with a stated goal to “build the planet’s largest daily connected audience,” according to the letter.
Earlier Wednesday, Twitter added an optional feature to curate tweets to the top of a users’ timeline that may have been missed while away, flicking at the kind of product changes that could make the network easier for new users to understand. In the letter, the company said that timeline change, announced only about 7 hours earlier, “has grown usage across the board.”
The company also said it would change some of its byzantine rules — like requiring “@replies” to have some character at the start of a tweet to ensure the posting shows up for all a users’ followers — and would let more people and media partners create and share its “Moments” tab that curate significant tweets around a real-time event.
In the latest period, Twitter’s loss narrowed to $90.2 million, or 13 cents a share, from $125.4 million, or 20 cents a share. Excluding certain items, profit rose to 16 cents a share, better than the consensus estimate for 12 cents by Wall Street analysts.
Revenue climbed 48 percent to $710.5 million. Analysts expected $710 million.