Why twitter user growth slows

Social media site Twitter suffered huge losses in 2013 according to their published profit and loss accounts – posting a loss of $645 million, the equivalent of £396 million. Alongside this their user base growth has stalled; the numbers increased by 10% at the start of the year however by the last quarter they rose by only 3.8%.

This won’t come as good news to shareholders as share prices dipped as a result of the above earlier this year, dropping by around 24%. This comes only three months after Twitter was floated on the New York Stock Exchange.

The problem perhaps stems from its engagement with users, as the declining growth would indicate. The fact is, Twitter is not new or exciting anymore and there are many other newer kids on the block ready to zap the attention of generation-ADHD. Indeed, whilst the user base is still growing slightly newsfeed refreshes were actually down by 7%. Those who are most likely to use and engage it with are professionals utilising to gather information or otherwise sharing their own. For many more they sign up and simply drift away from it either through not quite getting it or through getting a better social media fix elsewhere. It’s seems best suited to sharing amongst strangers than interacting with friends, which is perhaps why it continues to carry a professional slant.

Analyst from research company Forrester, Nate Elliott sums it up:

“If you don’t have an engaged user base, you don’t have a business. They have got to do better on users; that is the entire story.”

Another analyst, Arvind Bhatia from Sterne, Agee & Leach goes as far as questioning Twitter’s validity as a main player: “this report will question how mainstream Twitter is as a platform.”

Twitter gets its revenue from advertisers and from selling tweet data to third parties.

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