Can Twitter save itself as shares plunge following dismal results?

Just three months after its flotation on the New York Stock exchange, Twitter has reported a net loss of $645 million (£396 million) for 2013.

Its NYSE début for $45.10 (£28) per share back in November saw a frenzied scrabble of investment that amounted to an eye-watering leap of nearly 92 per cent in value from the initial IPO price of $26 (£16.17).

The gold rush raised some eyebrows, as analysts urged caution over Twitter's sluggish revenue stream. Twitter generates income largely through advertising, selling ad space and data on its users to companies. Indeed, more than 90 per cent of its revenue in the last quarter came from advertising, and whilst the social media site made a net loss of $511 million in the last three months of 2013, it was keen to stress that its revenue had more than doubled to $243 million.

Twitter's CEO, Dick Costolo, seems optimistic about the results. "Twitter finished a great year with our strongest financial quarter to date," he said in a blog post. "We are the only platform that is public, real-time, conversational and widely distributed and I'm excited by the number of initiatives we have under way to further build upon the Twitter experience."

Despite his positivity, opinion remains divided as to whether the microblogging site can deliver returns to investors. Shares fell as much a 12 per cent in after-hours trading on Wednesday 5 February.

Another big concern generated from the results is the dwindling growth of Twitter's user base. It averaged just 241 million monthly users in the last quarter of the year, up just 3.8 per cent on the previous quarter. Timeline views were also down nearly seven per cent, suggesting lack of use of the site.

This is a concern to some investors because since Twitter makes its money by selling advertising based on an active and varied user base, if those customers are no longer engaged the site is worth less to advertisers and consequently will generate less money and less return on investment.

Looking forward, Twitter projected revenue for the first quarter of 2014 of $230 million to $240 million, and full-year revenue of between $1.15 billion and $1.2 billion.

They're impressive figures, and to make them happen Costolo has outlined a four point plan for the company's 2014 roadmap to generate growth.

At an earnings call, Costolo said that one of Twitter's objectives is to make both public and private conversations easier, hinting at a move into the private messaging space. Whether that means a brand new app or a made over Direct Message tool, privacy will likely be a key feature of this year's Twitter communication.

Twitter also seems to have its head firmly in the mobile sphere, announcing a new native sign up for tablets and smartphones designed to make signing into Twitter easier.

An overhaul of the current chronological structure of Tweets could also be in the works. Instead of all Tweets appearing in one stream, Costolo hinted that they will be listed around topic-based discovery making content more easily searchable. This links into the fourth objective outlined by the CEO, introducing more photos and videos.

Whatever happens, 2014 is going to be a busy year for the social media behemoth.

For more information on Twitter, check out our comprehensive guide on how to use Twitter effectively for business. This Twitter guide contains several links to other features and guides that you might find useful.

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