Twitter Inc shares rise as revenue tops analyst estimates

Twitter recently made a design change to their web layout and as it turns out, this hasn’t gone well with its users. In April, the company announced a new program for tracking and purchasing ads through Google’s DoubleClick platform. While the last quarter’s earnings disappointed many investors, there were some positive signs which indicated that there is still some life in the company. And, there’s increasing hope that its Project Lightning feature, which puts photos and videos of the most trending events front and center on the site beginning this fall, is the catalyst of new and exciting products.

The stock continued to climb after the release of the report, and is now up another 5% in after-hours trading. Twitter’s user growth in the US came to a halt during the second quarter, stalling at 66 million users (including SMS), the same number as in the first quarter of the year. The company classifies these users as “SMS Fast Followers” and started counting them as part of its active user base in the first quarter. For one, Twitter has said that it wants a committed, full-time CEO but it doesn’t look as if Dorsey fits the full-time bill. Many are wondering whether Dorsey’s is fully committed to his role after his other company, Square, reportedly filed for an IPO confidentially.

Dorsey became interim CEO this month, replacing embattled CEO Dick Costolo.

Furthermore, with the expectations already so low, it might be easier for Twitter to beat the estimates, which is likely to improve market sentiments. It is unclear how much revenue these early efforts have generated.

The results “show good progress in monetisation, but we are not satisfied with our growth in audience”, Twitter co-founder and interim chief executive Jack Dorsey said in a release.

“I think this is a rare case where a new CEO might actually have a chance to make a difference”, says Oremus, due to the fact that the company is in a transitional period. Twitter has also been branching out, most notably buying the live-streaming service Periscope in March.

The company has been struggling to make money from direct-response ads that prompt users to take actions such as clicking on a link to an advertiser’s website or downloading an app.

Twitter has benefitted from its increasing mobile user base that has significantly added to its mobile advertising revenue.