Economy

Twitter shares drop 10% as revenue outlook disappoints

Twitter shares drop 10% as revenue outlook disappoints

In the past year, Twitter has focused on safeguarding the service amid scrutiny of its role in spreading fake news and election meddling as well as the broader data privacy backlash hitting the tech industry. The company said it expected total revenue of between $715m and $775m, the midpoint of which was below the Wall Street consensus of $762m.

Twitter has been ramping up efforts to reduce abuse on its platform and root out fake accounts and election malfeasance, issues that have crimped user growth in a competitive digital-advertising market.

However, the reveal is also giving investors and the general public a concrete idea of just how much smaller user engagement is with Twitter when compared to rival social networks.

Twitter Inc forecast that revenue in the first quarter would be weaker than expected while full-year operating costs would rise, sending shares down more than 10 percent in midday trading on Thursday.

Twitter has said it identified much less manipulation on its service during the 2018 USA midterm elections from bad-faith actors located overseas than two years earlier during the presidential campaign.

"2018 is proof that our long-term strategy is working", said chief executive Jack Dorsey.

The social media company posted a decline in monthly active users, due in part to its campaign of deleting millions of abusive accounts after facing criticism it was being used as a platform for political influence operations and hate speech.

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Daily users rose 9 percent in the fourth quarter to 126 million, a number Twitter is reporting for the first time - and one investors have been asking for as a better gauge of the service's popularity.

For the quarter through March, Twitter said it expected total revenue of between $715 million and $775 million.

Starting in the current quarter, Twitter said it would stop disclosing the number of monthly active users, a statistic internet companies have routinely reported over the past decade.

The number of monthly active users actually declined from 326 million in the third quarter of 2018 to 321 million during Q4. Facebook had more than more than a billion in the same period.

Excluding some items, Twitter reported quarterly profit of 31 cents a share, beating the average estimate of 25 cents. It makes about 90 per cent of its money from digital advertising.

The company increased global headcount by 16 percent in 2018, ending the year with more than 3,900 employees.