Twitter CEO Dick Costolo has 99 problems, and revenue growth ain't one. The company announced income of nearly $243 million for the previous quarter Wednesday, beating analyst estimates by more than $20 million. It's on track to make a healthy billion dollars and change this year. Its advertising strategy is bearing fruit. If that were all, Twitter investors would be doing a victory lap right now.
Instead, they're heading for the exits, driving Twitter shares down a little over 20% in after-market trading. Why? It's not that people are leaving the service; the number of Twitter users grew in the fourth quarter. No, Twitter's own stats reveal the real trouble with a very fundamental kind of user engagement.
