Twitter’s stalled user growth pulled shares down further

Twitter rolled out its controversial algorithmic timeline yesterday, and on the same day, it announced its fiscal fourth quarter earnings results.

“Twitter can grow in three ways: first, it can expand its user base; second, it can expand the engagement of its users; and third, it can increase the frequency and pricing for ads delivered”, said Michael Pachter of Wedbush Securities, according to Reuters. Twitter says it’s also going to improve how it acclimates new users to the service, speed up the act of tweeting, and make it easier to be “more expressive” with text, photos, and video, whatever that means.

“We’ve already seen that people who use this new feature tend to Retweet and Tweet more, creating more live commentary and conversations, which is great for everyone”, Jahr wrote.

Twitter’s user growth as well as metrics such as how often a user signs in and scrolls through the service are important because investors believe it indicates how big its advertising business can eventually become.

However, CFO Anthony Noto said that the users they lost were not of high quality, meaning that they visited Twitter occasionally during the month. But for the past two quarters the social media giant’s user base has been flat.

Twitter shed 5.4 percent to hit a new record low of $14.87 after reports over the weekend that the company was planning to change how it display tweets. Twitter said that it will be “listening to your feedback and making it even better over time, then we’ll be turning on the feature for you in coming weeks – look out for a notification in your timeline”.

The rearrangement will show up only if you enable it. Just go to your settings and choose “Show me the best Tweets first”. But apparently, a lot of people are confused about how Twitter works, so by highlighting tweets that are less live, it will also make Twitter less confusing?

Twitter CEO Jack Dorsey vowed that he was ready to tackle the problems during the company’s fourth-quarter earnings call. When asked how he is splitting up his time between Twitter and the mobile payments company he co-founded, Square Inc.