Twitter Revenue Rises While User Growth Plunges

Twitter Inc. is obviously doing something right. With revenue growth going up 61 percent in the second quarter, the company's advertising business is making a big impact. Sadly, shares went down 7.2 percent to $33.90 during after-hour trading, as the company went on to post a discouraging user growth. Still, revenue was significantly higher then it had been a year ago, hitting $502.4 million at the end period of June 30, compared to the previous $312.2 million. However, this marked Twitter Inc.'s worst quarterly revenue as a public company, which has led the social-media service to look to improving its spending on its direct-sales ads, which encourage users to download an app or visit a website.

There are still more challenges this company has to face. Twitter's potential to lure more users comes into question as it struggles to duplicate the temporary comeback it made during the first three months of the year. The company stated 316 million users sign in to Twitter at least once a month, up 2.6 percent from the prior quarter. Twitter also said 12 million people use the service through messaging platforms, up from 6 million the previous three-month period. 

Twitter's user growth is monitored closely by investors anxious to see the social-media service reach as high as rival Facebook Inc. Facebook isn't an easy competition, considering its user count is five times as much as Twitter's. Before former CEO Dick Costolo stepped down, he aimed at steering investors' attention beyond focusing on the metrics of users logging in once a month. And in effort to reach 500 million visitors who come to Twitter without logging in, the company has made content more visible to try to persuade them to return more and make an active account. What will the company do to get users to come back? The biggest challenge for the next CEO is to turn Twitter into a mass-market product. Read More.