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Twitter Shares Down As Advertisers Look To Facebook And Snapchat

Twitter shares have dropped 12% after the company failed to meet forecasts for revenue and user growth in the fourth quarter of 2016.

Advertising revenue fell 0.5% year-on-year to $638 million, compared to 53% growth for Facebook during the same period. Headlines surrounding Donald Trump’s presence on the social media platform failed to produce a significant spike in users during the fourth quarter, with an increase of two users to 319 million total marking the slowest quarter of growth in 2016.

Trump failed to invite Twitter to his tech summit in December because the company wasn’t “big enough” according to a spokesperson. CEOs from Apple, Alphabet, Facebook and Microsoft were among the attendees.

Revenue for the quarter grew 1% to $717.2 million, below analyst estimates of $740.1 million according to Reuters. This is the slowest growth since the company went public in November 2013.

Despite missing financial expectations, CEO Jack Dorsey noted that improved figures for user interaction were a positive indication of Twitter’s future.

“2016 was a transformative year as we reset and focused on why people use Twitter: it’s the fastest way to see what’s happening and what everyone’s talking about,” Dorsey said.

Daily active usage grew by 11% in the fourth quarter, higher than any other quarter of the year. Twitter also reported double digit growth for Tweet impressions and time spent on the platform.

“While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service. This will take time, but we’re moving fast to show results.”

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