Twitter: New user experience sucks, but will improve

Twitter shares were down more than 17.5 percent in after-hours trading in the wake of its first-ever quarterly earnings report. While the company blew past analysts' expectations for revenue, its user growth slowed significantly, leading many to worry it has peaked.
But Twitter doesn't think so. In its earnings conference call, CEO Dick Costolo tried to spin the slowdown in growth by admitting that he knows that the service's experience for new users is far less than ideal, and said the company is planning major initiatives to make things easier for new users from the moment they join the social network.
"There's a lot we can do to significantly improve the user experience," Costolo said. "We believe the changes we're making will lead to a much more satisfying user experience."
In its earnings report, Twitter said that it had brought in $243 million in the fourth quarter, up 116 percent year over year, and that its fiscal 2013 revenue of $665 million was up 110 percent over fiscal 2012. At the same time, it said it had 241 million monthly active users at the end of the fourth quarter, up 30 percent from a year earlier. But that growth number was down significantly from previous quarters, continuing a flattening trend. It had year-over-year growth of 48 percent, 44 percent, and 39 percent in the last three quarters.
Clearly, as Twitter attempts to grow revenue and become profitable, it has to boost its user base, and many worried that although the service has massive global reach, it was beginning to hit a growth ceiling.