Twitter Shares Slide

Twitter is not growing its user base or profits on par with investor expectations. Twitter this week announced 5% growth in its user base since last quarter. The company also announced that it lost $175.4 million on based on the stricter set of accounting rules that public companies must file with the SEC. However, on looser accounting standards the company claimed a modest $7 million profit. The difference in profit comes down to whether or not investors see stock-based compensation of its employees as a loss. Stock options are a standard option given to tech workers in the highly competitive Silicon Valley job market.

The company also announced that people viewed their timelines 181 billion times, a 14 percent increase year-over-year. Twitter is also being paid more for those views, with pricing now sitting at $1.77 for every thousand timeline views. That increase is up 83 percent year-over-year.

Revenue for the quarter was reported at $361 million, beating estimates of $351 million. In comparison, Twitter posted a revenue of $169 million in the same quarter last year.

While many internet users search Twitter to gather information as it happens in real-time, Facebook is used by more users on a daily basis to communicate more intimately with friends, family and even co-workers. Twitter is keenly aware of its user base and has been working to find ways to increase engagement. For example, 282 million users sign on and post messages to the social network on a monthly basis, while millions more simply browse the social network to gather real-time information. Millions of users also sign up for a Twitter account and never send out an actual tweet of their very own.

Facebook also appears to be more trusted for information than Twitter.  CNN recently called Twitter, “Statler and Waldorf from ‘The Muppet Show’ gleefully mocking everything that happens in real time.”

Research Analyst Mark May said that Facebook has five times more users than Twitter and Facebook users are 5 times more engaged than Twitter users.

Wall Street investors are nervous, which has caused Twitter shares to plummet in after-hour trading by more than 10% in shares. Twitter’s stock is down 32% year-to-date.