Twitter may have posted significant revenue growth for its second-quarter for the current fiscal year, but the microblogging platform continues to face mounting challenges that prevent it from manifesting the user growth its investors badly want to see.
On Tuesday, Twitter announced a 61 percent growth in revenue from $312 million during the same quarter the previous year to $512 million, a majority of which came from Twitter's advertising partners. But even then, Wall Street sent Twitter's stocks dropping by as much as 11 percent as the company's executives announced nearly flat growth for its user base.
Over the last three months that former CEO Dick Costolo headed the company, Twitter saw only two million new sign-ups, bringing its entire user base to just 304 million, a mere fraction of the 1.4 billion users of Facebook and the 100 million daily Snapchat users who send 700 million messages every day.
Twitter chief financial officer Anthony Noto, who is believed to be one of the candidates to become Twitter's permanent CEO, remains honest about the company's struggles, telling investors that it will take some time before Twitter develops a bigger user base because the company has failed to show people how they can benefit from the use of its platform.
"We do not expect to see sustained meaningful growth (in monthly active users) until we start to reach the mass market," Noto says. "We have not clearly communicated Twitter's unique value. And as a result non-users continue to ask, 'Why should I use Twitter?'"
Twitter's struggles continue even as the website rolls out minor improvements to tweak the user experience and make it easier for people to figure out how to use the platform. The company has high hopes for one of its upcoming initiatives, dubbed Project Lightning for now, which provides a human-curated feed of real-time events to help people get the most useful updates from Twitter about popular events such as the World Cup or the pilot episode of popular TV shows.
But even then, Twitter remains in a quagmire about the future of its leadership. As the company sees a steady trickle of management executives leaving, with the most recent ones including its VP of product management Christian Oestlien and chief communications officer Gabriel Stricker, it remains to be seen how a fleet of ships with no permanent captain will traverse the rocky business waters.
Interim CEO Jack Dorsey, who cofounded the platform in 2006, is also head of mobile payments company Square, which recently filed for initial public offering. Analysts think Dorsey will not leave Square, where he owns a 25 percent stake, for Twitter, and Twitter announced that it prefers a CEO who can commit full-time to the job.
But Dorsey says he will not choose between Square and Twitter. Although he does not say which company he plans to head long-term, he says he is dedicated to both of the companies he helped found.
"It's not either/or for me," he says. "I'm going to do whatever it takes in whatever role to make both companies successful.
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