Twitter Inc. grew its user base 19.5% in the fourth quarter compared to a year earlier, but only 1.4% compared to the third quarter. That slow growth is far behind burgeoning social networks like Instagram and Tumblr.
While the social network’s fourth quarter user growth was disappointing, Dick Costolo, Twitter’s CEO says a little more than a month into the first quarter of 2015, Twitter is turning things around. Twitter is projecting adding 13 to 16 million users in the first quarter of 2015, which would be an increase of at least 4.5% over the fourth quarter.
Twitter has been aggressive in its attempts to counteract is lackluster growth by seeking to maximize the number of consumers who see its content, regardless of whether they’re signed into the social network. For instance, Twitter on Thursday struck a deal with Google Inc. to make its tweets visible in Google’s search results as soon as they’re posted.
Earlier this week Twitter also took its first step toward making money from people viewing tweets off of its platform by serving marketers’ promoted tweets—Twitter’s ad unit that lets an advertiser pay to ensure a particular number of consumers see its message—to two Yahoo Inc.-owned sites and apps, news reader application Flipboard and Yahoo Japan. Both host sections on their sites that feature Twitter streams.
“We’re beginning to realize the potential for our ad product, by showing relevant timely ads wherever there is Twitter content,” Costolo said during a conference call with analysts.
Twitter’s moves aim to boost revenue for Twitter. The social network’s revenue increased nearly 76% in the fourth quarter year over year and 111% for the full year.
Chief financial officer Anthony Noto said during the call that the primary drivers of that growth were three ad units:
- Website cards, which let marketers feature their web site content within a tweet from the brand.
- Mobile app downloads, which let marketers place ads that encourage consumers to download their mobile apps.
- Promoted video, which let a marketer pay to increase the prominence of a post containing a video much like the way advertisers use Twitter’s promoted tweet ad unit.
“Two of these three products were introduced in the back half of the year and promoted video currently remains in beta,” Noto said.
For the fourth quarter ended Dec. 31, Twitter reported:
- $432 million in ad revenue, up 96.4% from $220 million a year earlier.
- Ad revenue of $2.37 per 1,000 views from U.S. users, up 59.1% from $1.49 in 2013.
- Ad revenue of $1.16 per 1,000 views from international users, up 93.3% from 60 cents in 2013.
- $479 million in total revenue, up 75.5% from $273 million from the same period in 2013.
- Mobile advertising accounted for roughly 88% of advertising revenue, or roughly $380.2 million. That’s up 130.7% from roughly $164.8 million a year earlier, when mobile ads accounted for about 75% of Twitter’s advertising revenue.
- 288 million monthly active users, up 19.5% from 241 million in the same period a year earlier, but up only 1.4% compared to 284 million the third quarter.
- Roughly 230.4 million consumers, 80% of Twitter’s monthly active users, accessed Twitter from a mobile device.
- $125.4 million net loss compared to a $511.5 million loss a year earlier.
For the full year, Twitter reported:
- $1.255 billion in ad revenue, up 111.3% from $594 million a year earlier.
- $1.403 billion in total revenue, up 111.0% from $664.9 million.
- $577.8 million net loss compared to a $645.3 million loss a year earlier.