Breaking Down Twitter's Slowing User Growth

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Oct. 3 (Bloomberg) -- Bloomberg's Cory Johnson and Jon Erlichman and IDC Research's Crawford Del Prete examine Twitter's user growth. They speak with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

18 months ago they had 138 million users.

There are up to 218 million by the end of june.

The growth rate of those users, they don't tell us how many daily users they have in any given quarter.

They have got 100 million daily active users.

You can see the user growth slow.

The sequential growth is 18% and that fell off to 9% and 11%. user growth slowing dramatically.

Let's break it down.

Look at the u.s. numbers, their most developed market.

Up to 49 million.

User growth they're much slower.

It shows monthly active users growing only a million in the last quarter.

That growth rate falling dramatically from 13% to 2% in the most recent quarter.

You can see the slow and growth in users for twitter and its most developed markets in the u.s.. we saw an acceleration of user growth after the highly publicized ipo.

It might actually help them get more users, because people will say, what is this twitter thing.

Maybe i should check it out.

That's a good point.

I want to take a look at a couple of other growth numbers.

Jon erlichman has been doing the math on sales growth versus spending growth.

Twitter has been spending a lot lately.

They're talking about leasing another office space right next door that would double their total office space.

What are you seeing when you do the math?

The sales and spending are both going up.

They told us that in the first half of the year they generated 200 $53 million, which would put them on pace to generate more than half a billion this year -- $253 million, which would put them on pace to generate more than half $1 billion this year.

With the revenue coming from the mobile product, that is an impressive number.

On the spending side, and to your point, they do expect their headcount to go up.

They say that in this filing.

To better their sales progression in international markets, they will be hiring people in australia and brazil and the netherlands.

Costs and expenses of under $100 million.

This year, $360 million in costs and expenses.

-- $316 million in costs and expenses.

That would be growth in the neighborhood of 60% year-over- year, the same growth on the revenue side that we can estimate right now.

We are looking at three numbers, user growth, sales growth and spending growth.

What do you make of these trends when you look at them all a wants?

-- at once?

This company has to start to scale.

You have to be able to say, one of two things has to happen.

They have to spend less money to get more users over time, and/or they have to be able to monetize those users they are getting in better ways and new ways to scale the business going forward.

I would suspect it's going to be that latter number, given the deceleration they're seeing that will be talked a lot about.

Crawford del prod of idc, cory and john, we will have much more.

This text has been automatically generated. It may not be 100% accurate.


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