AllThingsD: Twitter falling well short of user growth target

Though Twitter CEO Dick Costolo proclaimed earlier this year he expected the microblogging giant to have 400M monthly active users (MAUs) by the end of 2013 after hitting 200M in Dec. '12, sources tell AllThingsD Twitter currently has ~240M MAUs.

That implies a 2013 growth rate of less than 4.5M MAUs/month, and suggests Twitter will end the year with ~260M, far below Costolo's target. For reference, Facebook (FB -0.9%) closed Q2 with 1.15B total MAUs (+3.6% Q/Q and +21% Y/Y) and 819M mobile MAUs. Om Malik previously reported Twitter is falling short of Costolo's target, but didn't give a specific number.

Twitter employees tell AllThingsD their company "has a basic problem with churn — lots of people sample the service, and then stop using it." Twitter is trying to address the problem in part by adding Facebook-like features (such as a conversations view) it hopes will make the service less intimidating to new users. Ironically, this is happening while Facebook tries to become more like Twitter.

Twitter shareholders GSV Capital (GSVC +14.5%) and the Firsthand Technology Value Fund (SVVC +6.5%) remain up sharply. However, Chinese microblogging leader Sina (SINA -2.4%) has given up yesterday's AH gains.

More on Twitter's IPO: I, II, III

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Comments (22)
  • J Mintzmyer
    , contributor
    Comments (8979) | Send Message
    I like Twitter (just started using it 6w or so ago), but ultimately $FB is far far superior in social media and networking if you aren't famous, a business, or a reporter.


    I wouldn't invest a dime in Twitter at any price.
    13 Sep 2013, 02:05 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (10304) | Send Message
    Ultimately Twitter is the place that the important people go and Facebook is where you talk to old HS buddies. I'd guess the avg Twitter user is worth 10x a FB user.


    My guess is that Twitter is the bigger stock in 5 years.
    13 Sep 2013, 02:59 PM Reply Like
  • James A. Kostohryz
    , contributor
    Comments (6338) | Send Message
    I personally think Twitter is going to the ash heap unless they radically change their product.
    13 Sep 2013, 03:13 PM Reply Like
  • ShellyCCC
    , contributor
    Comments (111) | Send Message
    I agree with J Mintzmyer, FB is for socializing and networking, and twitter is for the famous.
    13 Sep 2013, 03:34 PM Reply Like
  • varan
    , contributor
    Comments (5898) | Send Message
    I agree with Mr. Kostorhyz.


    Twitter is a tool for political and entertainment hasbeens (and neverbeens) like Michele Bachman and the Kardashians. For other, not so much.
    13 Sep 2013, 04:02 PM Reply Like
  • apppp
    , contributor
    Comments (359) | Send Message
    Your all silly pessimists I plan to invest in companies like twitter without earnings so that I don't have to be constrained by that methodology.
    13 Sep 2013, 04:05 PM Reply Like
  • Karlos DW
    , contributor
    Comments (28) | Send Message
    Must admit, I wouldn't use either. I've got absolutely no idea why I would want anyone (friends or strangers) to know what I've done today! My life is mine and if I want to inform someone I went to a shop to buy a biro then my life would be even duller than I realised. Plus I really don't care if a buddy of mine bought a different colour of pasta and managed to burn his favourite pan whilst cooking it, oh how I would laugh at signing in & reading that gem.....
    13 Sep 2013, 04:09 PM Reply Like
  • jamesfreiley
    , contributor
    Comments (158) | Send Message
    I hope they price it high so I can short it...just like the facebook debacle...
    13 Sep 2013, 05:08 PM Reply Like
  • James Sands
    , contributor
    Comments (2752) | Send Message
    I think the point of Twitter and Facebook is advertising growth. This relates to consumers and brands. The focus shouldn't be necessarily on a personal preference for the site.


    Case in point. I wrote Facebook off because I don't use the service and it didn't make sense (to me). Now in hindsight, I realize that Facebook has implemented a successful strategy for mobile and that there was an opportunity when it was priced in the teens.


    Digital and mobile advertising is a very tough area to find some winners. If Twitter is priced at any discount soon after it begins trading, I would think that there may be an opportunity for investors. Again we all need to do our due diligence once the S-1 is filed.


    Digital video advertising is going to be a huge catalyst for mobile and Web. The question is how will companies aside from Google and Facebook be able to make significant money and have strong margins?
    13 Sep 2013, 05:44 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1828) | Send Message
    Twitter is a one trick pony. Nothing stops FB from introducing a twitter like system. Since people use FB app anyway, if it could tweet too, why would they need twitter?
    13 Sep 2013, 06:11 PM Reply Like
  • James Sands
    , contributor
    Comments (2752) | Send Message
    Sounds eerily similar to comments made regarding LinkedIn and Facebook's potential to have a professional social network.


    I believe Facebook's Twitter equivalent is already embedded within the site regardless of mobile or Web use, but lends itself to more of a "chat" functionality, like Yahoo chat, Messenger, etc.


    Twitter is more like a stream of information, categorized by a user's preferences.
    13 Sep 2013, 06:16 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1828) | Send Message
    Yes, I believe in the end FB has the potential to swallow Twitter, LNKD, even gmail. Probably not search since they would need to crawl outside their own walled garden. Unless they unwall their garden, other entities may put up a wall around theirs.


    But given google's ever increasing complexity due to the effort to shove google+ down our throats, the recent missteps with gmail compose, picasa etc, I can see FB offering a email service and gmail losing DAU's.


    The trade off of letting Zuck troll through the contents of our email is not much since anyway google does just that. If Gmail loses steam, I think google is in trouble.
    14 Sep 2013, 10:52 PM Reply Like
  • 7of9
    , contributor
    Comments (515) | Send Message
    Twitter is an attractive acquisition target which will put a floor on their share price.
    13 Sep 2013, 07:36 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1828) | Send Message
    Does it matter when the talking heads on CNBC led by the mother of all talking heads Cramer stampede the retail investors to pay virtually any valuation/share price desired by the founders/underwriters?


    I have zero doubt retail investors will again line up hat in hand clamoring for the IPO shares because the talking heads will convince them "this time its different", "Twitter still has room to grow", "twitter is early in its growth cycle" "twitter is not as mature as Fb was when it went public", "twitter has several more quarters of rapid user growth left",
    14 Sep 2013, 10:56 PM Reply Like
  • Bouchart
    , contributor
    Comments (1174) | Send Message
    Twitter seems like a service that could easily be duplicated by another firm. All they have is their brand.
    15 Sep 2013, 12:41 AM Reply Like
  • alec2003
    , contributor
    Comments (51) | Send Message
    Yea you can duplicate it but you need everyone to move with you. Otherwise there is no point ...
    15 Sep 2013, 11:44 AM Reply Like
  • TruffelPig
    , contributor
    Comments (4208) | Send Message
    No clue how to value Twitter. How much cash flow do they produce?
    13 Sep 2013, 09:12 PM Reply Like
  • Bouchart
    , contributor
    Comments (1174) | Send Message
    So does Twitter actually make money, or is it like those 1990s tech stocks where only eyeballs mattered?
    15 Sep 2013, 12:32 AM Reply Like
  • alec2003
    , contributor
    Comments (51) | Send Message
    It makes money. But in Wall Street it's not about making money but rate of growth in the future.
    15 Sep 2013, 11:47 AM Reply Like
  • Randal James
    , contributor
    Comments (4422) | Send Message
    Twitter, which I only see referenced to, reminds me of those ads for Dr. Pepper where someone shows up with a shirt and then someone else and soon there is a virtual army of people with nothing in common except a supposed fondness for a soft drink - and, apparently, choreography.


    Social media has run aground when you see an ad for potato chips and it invites you to "Follow us on ______!" Heaven help us if our lives are so shallow as to need to keep up with the chips.
    15 Sep 2013, 02:11 AM Reply Like
  • FastmoneyLW
    , contributor
    Comments (37) | Send Message
    I'm long FB.
    15 Sep 2013, 11:58 AM Reply Like
  • changu
    , contributor
    Comments (3) | Send Message
    Long FB! Facebook was able to mimic exactly what twitter does with a few lines of code. Even though it doesn't seem like a success is irrelevant. My 7 year old cousin uses Facebook as do my 65 year old aunts and uncles. Facebook has an entire database of information on each of its users and once they start with video marketing and Instagram monetization the company will skyrocket.
    15 Sep 2013, 11:27 PM Reply Like
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