Twitter shares dip as user growth flounders

In a letter to shareholders discussing the earnings report, Twitter also discussed the efforts of increasing the number of users and said that it was dedicated towards making the service less confusing.

The number of monthly active Twitter users, excluding those who use the service via SMS, fell from 307 million to 305 million last quarter, the Verge reported.

Analysts are concerned for the future of the site, however. But Dorsey assured the investors that Twitter will fix conversations – replies – amongst other things to make Twitter easier, less clunky, and more attractive to users.

Dorsey took a step in that direction Wednesday, announcing plans to tweak Twitter’s timeline to highlight tweets that the service will appeal the most to each user, instead of only presenting them in reverse chronological order.

“The announcement has caused some dissent among Twitter users, who have created the hashtag – meaning a popular topic – “#RIPTwitter”, or “rest in peace, Twitter” – something normally said about a person who has died. The company said its base of advertisers has also ballooned to 130,000, up 90 percent from the year before.

Still, with Twitter’s performance in the fourth quarter, it’s unclear whether a revamped timeline is enough to impress investors as the company struggles forward through a recent restructuring of leadership. Although Twitter managed to meet the analysts’ expectations of $710 million and 12 cents a share, the age-old problem of its user base has got worse. When you open Twitter after being away for a while (either in the mobile app or on the desktop), at the top of your feed, Twitter will show tweets “you’re most likely to care about.”

Twitter shares plunged in NY last night after the social network revealed growth in new users has stalled for the first time in its history.

This week, Twitter did unveil a new Timeline algorithm but the changes were tame compared to what earlier reports had suggested. Desktop users need to log in to their account on twitter.com and visit Account settings page.