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Twitter shares fall on revenue forecast, anemic user growth

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A portrait of the Twitter logo in Ventura, California December 21, 2013. REUTERS/Eric Thayer

SAN FRANCISCO (Reuters) - Twitter Inc gave a disappointing revenue forecast and reported slower user growth than expected, pushing shares of the microblogging company down about 13 percent.

The forecast, which came even as Twitter beat third-quarter profit and revenue estimates, suggested that more time is needed for a turnaround as social media competition grows from the likes of Facebook Inc's Instagram and Messenger apps.

Twitter on Tuesday forecast fourth-quarter revenue of $695 million and $710 million, well below analysts' average estimate of $739.7 million according to Thomson Reuters I/B/E/S.

Executives on a conference call gave no reason for lowering the forecast. But analysts said it could be due to anemic user growth and Instagram's advertising share growth after opening up its platform to all advertisers in September.

Twitter had 320 million average active monthly users in the third quarter, up from 316 million in the prior quarter, missing analysts' expectations of 324 million.

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