Twitter COO: Confident we’ll return to user growth

Shares of Twitter plunged more than 4 percent on Thursday, one day after the company reported a sequential drop in user numbers last quarter.

But Adam Bain, Twitter’s chief operating officer, on Thursday sought to highlight the company’s product innovation, revenue growth and business units.

In addition to reporting earnings on Wednesday, Twitter introduced an option that allows users to see tweets by relevance, as opposed to the platform’s standard display in reverse chronological order.

Reports ahead of the announcement that Twitter would move in that direction set off a tweet storm of criticism this past weekend, but Bain said the company would remain focused on delivering real-time information.

“We’re focused on live because we think live is actually a really powerful part of the platform, whether live video or live information,” he said during an interview on CNBC’s “Squawk on the Street.”

“On the product side, we’re focused on refining an iconic product, and with this focus on live, we know that we will see a return to user growth,” he added.

Twitter’s user base has essentially remained stagnant at 300 million in 2015, raising concerns about future revenue growth.

Bain stressed that Twitter believes the scope and scale for marketers on the platform is actually 800 million users, taking into account the 500 million people who see tweets but are not logged on. The company recently began displaying ads to people in this “logged out state,” he added.

Twitter announced nearly 60 percent year-over-year revenue growth for 2015. For the fourth quarter, earnings came in 4 cents above expectations at 16 cents per share on $710 million in revenue, in line with consensus.

Still, some say Twitter should put less emphasis on advertising revenue and instead focus on selling user data and open its API, or application programming interface, which would allow third-party developers to create applications for the platform.

Bain said Twitter is already diversified, pointing to its businesses in syndicated ads, data and licensing, as well as its advertising exchange MoPub. He said the data business in particular helps its clients address customer service issues at a time when many consumers use Twitter to vent their frustration.

“The businesses themselves are doing customer service out in the open and actually turn the customer moment into a marketing moment,” he said.

Twitter monthly average users (MAUs)In millions, not including SMS-only usersQ1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 20150100200300400Twitter

Twitter said Wednesday that it expects first-quarter revenue of between $595 million and $610 million, disappointing Wall Street, which had been expecting guidance of about $633 million, according to StreetAccount.

The first quarter is traditionally softer than the preceding holiday season for Twitter’s brand advertisers, Bain said. As a result, Twitter’s largest business will be affected by the seasonal swing.

At the same time, the company is confident it will expand its fastest-growing business in direct response, or “advertisers looking for clicks and conversions” from their tweets, he said.

[“source -pcworld”]