Twitter advertising revenue falls, shares drop more than 10 percent

Thu Feb 9, 2017 1:49pm EST
 
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By David Ingram and Supantha Mukherjee

(Reuters) - Twitter Inc (TWTR.N: Quote) posted the slowest revenue growth since it went public four years ago, sending shares down more than 10 percent on Thursday on fears that rivals Snapchat and Facebook Inc(FB.O: Quote) were winning the war for advertising.

Revenue from advertising fell from a year ago and a 4.0 percent year-on-year rise in users to 319 million fell short of Wall Street forecasts as well.

The election of prolific tweeter Donald Trump as U.S. president failed to produce a "Trump Bump" in Twitter's results, and Twitter declined to give guidance on future revenue with Chief Executive Jack Dorsey asking for patience.

The microblogging service has struggled to find a formula that will attract a new crop of users or advertisers even as rivals have ridden a wave of rising investment in internet advertising.

The lack of revenue growth has raised questions about Dorsey's leadership and whether the company would be bought by a bigger media firm. Financial markets speculated about a sale of Twitter last year, but no concrete bids were forthcoming.

Dorsey told analysts on a conference call on Thursday that Twitter was investing in machine learning and searching for ways to engage advertisers.

"It will take time to show the results we all want to see, and we're moving forward aggressively. The whole world is watching Twitter," he said.

Quarterly revenue growth was the slowest since Twitter went public in 2013. Advertising revenue in the fourth quarter declined 0.5 percent year-over-year to $638 million, and the company said that advertising revenue growth would continue to lag user growth during 2017.   Continued...

 
People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken in  Warsaw September 27, 2013.   REUTERS/Kacper Pempel/Illustration/File Photo