Solid growth of active users in the second-quarter has soothed concerns that Twitter Inc. (NYSE:TWTR)’s future was doomed, according to analysts on Wall Street. The company’s stock soared in Tuesday trading session after the company reported growth on its revenue as well as its active user base. The second-quarter results according to Redpoint Ventures’, Ryan Sarver, in an interview on Bloomberg has eliminated concerns that the user base is small and maturing.
It goes without saying that the second quarter, according to Mr. Sarver, was one of the best quarters, not only for the company, but also to investors who were hoping the company could register improved user growth, as well as revenue margins.
“I think this is kind of a banner quarter for them and what everyone has been hoping to see; that is incredible growth, incredible engagement, and I think the revenue just continues to really beat everyone’s expectations, so a great quarter overall ” said Mr. Sarver
Bloomberg’s Editor, David Kirkpatrick, on the other hand, maintains reservations on the company’s user growth, which he believes could have done much better in markets where the company had the potential to make more money. Coming up with a product that ensures a constant connection between users while guaranteeing value, remains the best play for Twitter Inc. (NYSE:TWTR), which can ensure further growth of the user base, according Mr. Sarver.
The World Cup was one of the typical products that brought many people together, sharing all the tit-bits about the event through tweets. The world cup also offered one of the best advertising platforms for Twitter Inc. (NYSE:TWTR). Some of the concerns that Mr. Kirkpatrick raised about Twitter Inc. (NYSE:TWTR) include the minimal amount of time that users in America are using on the platform, as well as the complexity of using the platform as a whole.
International users on the platform also continue to contribute a minimal amount of earnings for the company something that Twitter Inc. (NYSE:TWTR) will have to work on.
“[…] I, myself, still get confused about certain things about it. I think they got an ongoing problem with the product itself and they also have a problem even though they have a lot of users, the amount of time that American users were spending on it is a little bit down. So there is another slight negative. Plus, they also have this huge problem with international users, which earned them way less money per user than they do domestically […],” said Mr. Kirkpatrick
Kirkpatrick remains pessimistic about the ability of Twitter Inc. (NYSE:TWTR) to attain the amount of growth seen in the likes of Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOG).
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