Twitter's first quarter earning results fell in line with expectations, and yet, the company's shares traded down by more than 10% in after-hours trading. Twitter's supporters have taken to — where else? — Twitter to defend the company's long-term prospects. Early investor Chris Sacca bit back against the criticisms that, with 255 million monthly active users and slowing growth, Twitter cannot break into the mainstream.
Sacca called out Wall Street's lack of faith in Twitter TWTR , before stressing that investors should be watching the growth of MoPub (Twitter’s mobile ad network), growth in revenue, increased reach and forthcoming ad products rather than counting users. He even referenced his former employer’s golden Wall Street reputation. "No one knew how to measure Google either, but we kept printing money," he tweeted.
Twitter is not quite printing money yet; the company is not close to turning a profit. Twitter reported revenue of $250 million in the first quarter of 2014, up 119% from the same period last year. The company reported a net loss of $132 million.
Sacca clearly had a good grasp of Twitter's main talking points, as CEO Dick Costolo touted those same areas of growth in the company's quarterly earnings call this evening. Sacca, Costolo, and other "key insiders" have publicly said they will not sell their shares following the company's six-month lock-up period after its IPO, in a sign of long-term alignment with the company's growth. As such, Twitter will not issue a secondary offering of its shares.
The story Twitter wants told about itself is one of impact and reach. The story Wall Street and Twittering masses are telling is one of slowing user growth. Internally, Twitter expected to hit 400 million monthly active users in 2013, according to a Wall Street Journal report. In reality, it only hit 241 million.
Still, Costolo emphasized Twitter's reach by highlighting major live events like the Oscars, the Olympics and the Superbowl. These, alongside major news events like the Malaysian plane disappearance, are when Twitter’s realtime feed of commentary shines. For example, Twitter counted 3.3 billion views of Tweets during the Oscars. Planned events are more attractive to advertisers than breaking news, Costolo noted, and he said that Twitter will continue to explore ways to scale and syndicate that content.
The other place Twitter hopes to strengthen its product in hopes of luring in more users? Private direct messages, or DMs. Twitter believes that, internationally, there is a big opportunity to grow through its private short messaging feature. "The opportunity will lie in "making it easier to move more fluidly in the public and private conversation," Costolo said.
