World Cup Gave Twitter a Big Burst in Traffic




By VINDU GOEL

Whatapp NewsTelegram News

SAN FRANCISCO — The World Cup had a second winner: Twitter.

The social networking company reported strong growth in the second quarter, driven in part by heavy use of the service by soccer fans around the world during the monthlong tournament, which spanned June and July.

Twitter’s results far exceeded Wall Street’s expectations, and the company’s shares rose about 29 percent in after-hours trading.

“During the World Cup, we delivered the kind of events experience that I’ve wanted to see from us for some time,” Dick Costolo, Twitter’s chief executive, said in a conference call with analysts. The service was tailored to each game and each country’s fans, giving a more personalized experience than new users have typically encountered in the past.

Revenue soared 124 percent during the quarter and the average number of people using the microblogging service in its June quarter was up 6 percent from its March quarter.

However, Twitter reported a continued decline in how much people were using the service, as measured by timeline views, a measure the company invented.

Americans on average refreshed their Twitter feeds 792 times a month during the quarter, a drop from the first quarter and last year’s second quarter. Globally, timeline views were down 7 percent from a year ago, but up 4 percent from the first quarter as the company made a huge push to recruit new international users during the World Cup.

Despite the flat usage of the service, Twitter has demonstrated a striking ability to extract more advertising revenue from each user. For the quarter that ended June 30, the company reported revenue of $312 million, up from $139 million a year ago. Analysts had expected the company to post revenue of $283 million.

Mark Mahaney, an Internet analyst with RBC Capital Markets, said that, like Facebook, Twitter was just beginning to climb a steep revenue curve as advertisers discovered its ability to reach mobile users. “This can be a highly profitable business,” he said. “They’ll be able to dramatically increase their monetization just like Facebook did.”

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Twitter reported a net loss of $145 million, or 24 cents a share, compared with a loss of $42 million, or 32 cents a share, a year ago.

Excluding certain stock-based compensation and acquisition costs, the company had a profit of $15 million, or 2 cents a share, compared with a net loss of $16 million, or 12 cents a share, a year ago. On that adjusted basis, analysts had expected the company to report a loss of 1 cent a share.

The World Cup illustrated Twitter’s greatest strength and its biggest weakness: As with the cable news networks, its traffic is dependent on surges of public interest around real-time events. Twitter said its users sent more than 672 million tweets during the entire tournament — more than during any other event in its history. But the company’s chief financial officer, Anthony Noto, attributed the drop in usage by Americans during the quarter to the lack of galvanizing events like the Super Bowl that occurred in the first quarter.

“What you’re seeing now is a World Cup bump,” said Debra Aho Williamson, a principal analyst with the research firm eMarketer. “The proof will be what their numbers look like next quarter, and the quarter after.”

Ever since it first sold stock to the public last November, Twitter has been struggling to find ways to make its service more engaging, especially to newcomers.

The average number of users in a given month, a crucial figure used by Wall Street to measure social networks, has grown by single-digit percentages from quarter to quarter since its stock offering.

As of June 30, Twitter said, it had 271 million monthly average users, up from 255 million as of March 31.

Twitter executives have argued that such figures understate the service’s true reach, since many of its messages are embedded on other websites and apps and appear in mass media outlets like television.

In the conference call with investors, Mr. Costolo said that the size of Twitter’s audience was two or three times its active user base, and that the company was actively working on ways to more deeply engage those casual visitors.

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