Twitter Inc (NYSE:TWTR) has posted impressive growth in the second quarter, fueled by the non-stop tweets from the soccer fans all over the world for a month. The results were higher than the Wall Street estimates and shares rallied over 29% in the after-hours trading.
World cup boosted results
Dick Costolo, Twitter Inc’s chief executive, said in a conference call with analysts, “During the World Cup, we delivered the kind of events experience that I’ve wanted to see from us for some time.” Twitter customized its platform for fans of each country, and every game was something new for the users.
Twitter gained maximum from the World Cup, but the event was also, one of the biggest weakness of the company. According to the company, the users have sent more than 672 million tweets during the entire tournament, which is highest in the history. However, like any cable news networks, the traffic for Twitter is largely dependent on public interest around real-time events.
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Twitter going Facebook way
User’s rate of service usage has been almost flat, but the company has reflected its potential to earn more advertising revenue from each user. For the most recent quarter, Twitter posted revenue of $312 million, an increase from $139 million in the previous year. Analysts estimated the revenue at $283 million.
The micro-blogging site revenues surge of 124% during the quarter and the average number of users in the June quarter increased 6% from the March quarter. There was a sequential decline in the number of people using the service as tracked by the timeline views. The statistics revealed that Americans on an average refreshed their tweet feeds 792 times during the quarter, which is a decline from the corresponding quarter of last year. On the global front, timeline views declined 7% from the previous year, but jumped 4% from the first-quarter driven by the company’s effort to win more users during the World cup.
Anthony Noto, chief financial officer at Twitter, said that Americans lowered the use during the quarter due to lack of inciting events like the SuperBowl that occurred in the first-quarter.
According to Mark Mahaney, an analyst with RBC Capital Markets, Twitter is going Facebook way and has started advancing on steep revenue curve as advertisers are recognizing it’s potential to reach mobile users. “This can be a highly profitable business,” he said. “They’ll be able to dramatically increase their monetization just like Facebook did.”