Can Twitter Revive its User Growth?

The article is to provide understanding to Twitter’s user growth problem and its plan to solve them.

The year 2014 hasn’t been good for Twitter Inc. shareholders. Shares have tumbled around 33% in the last 12 months as the social network continues to find it difficult to prove investors that it can revive its user growth. The company reported worse than expected user development in second quarter results last week.

But the social media network has a strategy to solve such problems. However, it might take some time for these measures to give any results.

Twitter interim CEO and founder, Jack Dorsey said in company’s 2QFY15 press release, “Our Q2 results show good progress in monetization. But we are not satisfied with our growth in audience,” He admitted.

Company’s YoY quarterly growth of user base have keep on declining since it went public in the year 2013. Especially, company’s user’s sequential growth has reduced to single digits lately, causing shareholders to gamble whether the user base might reach its peak or not.

During second quarter, monthly active users of Twitter reached 316 million, 15% more than previous year quarter and 2.6% sequentially. Particularly, the company reported users in second quarter benefitted from its new strategy of adding SMS Fast Followers in its MAUs accounts. After excluding SMS Fast Followers, its user base only grew by 12% YoY and only 0.07% sequentially.

Shareholders should be cautious to allocate company’s SMS Fast Followers more weight. It access Twitters service through text messages, in the market where smartphones are still noticeable.

Twitter has been putting g efforts to solve user growth issues with instant timelines, which is a feature designed to determine users and provide instant value. But it has not yet had any sort of “meaningful impact” on Twitter’s audience.

But in spite of management clear dissatisfaction in the attempts made by company to revive user growth, the company is still hopeful about its abilities to solve slow user growth issues.

Dorsey said that Twitter will target to “improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter’s value faster, and better communicate that value.”

Precisely, the social networking site says it will soon start its Project Lightening this year to ease its service and bring value. This step, company says, will mainly emphasize on event based content. Adding to this, Dorsey said, Twitter is planning to display users further meaningful tweets and discussions faster.

Twitter stock is up 0.26% to $29.34 at market close on Tuesday August 4.

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