SAN FRANCISCO/BENGALURU • Twitter has reported its slowest revenue growth since going public in 2013 and set a disappointing forecast, fanning concerns that faster- growing social media services will make it a niche product.
The microblogging service operator's shares fell 11 per cent in extended trading to US$16.40. While Twitter struggles to find a way to boost user growth and win over advertisers, social media services such as Instagram and Snapchat are expanding their footprints.
Co-founder Jack Dorsey returned to the company as chief executive a year ago, but his plan for reviving Twitter is at best seen as unfinished.
The firm's second-quarter revenue missed Wall Street estimates, and its revenue forecast for the current quarter of US$590 million (S$801 million) to US$610 million was well below the average analyst estimate of US$678.18 million.
Twitter's user base increased about 1 per cent to 313 million average monthly active users in the second quarter from 310 million in the first quarter.
"Clearly, the turnaround is still a work in progress and the question of whether being a platform for a mass audience versus a niche audience needs to be answered," said Mr James Cakmak, analyst at Monness, Crespi, Hardt & Co.
Earlier this year, Twitter laid out a long-term strategy to turn around its business, focusing on five areas: its core service, live-streaming video, the site's "creators and influencers", safety and developers.
In live video, the company has signed deals with Major League Baseball and the National Basketball Association to revive user growth and attract more advertising dollars.
Executives also said Twitter was investing more in user safety as the company continues to grapple with high-profile instances of abuse and harassment.
Struggling with flat user growth and lower spending by advertisers, Twitter has doubled down on attracting more people and encouraging existing advertisers to spend more as it tries to shape its stagnating business.
"We are a year into Dorsey coming back and there is really no end in sight of when it is going to start picking up to where investors are going to be happy," said Mr Patrick Moorhead, an analyst at Moor Insights & Strategy.
REUTERS
