Twitter's monthly active users up by 24 per cent
Twitter's monthly active users up by 24 per cent
The number of monthly active users on Twitter hit 271 million, up 24 per cent when compared with the same period a year earlier.

New York: Twitter shares surged in morning trade on Wednesday after the messaging platform eased investor concerns with a quarterly report showing strong user growth and robust revenues.

Twitter rallied nearly 20 per cent to close at $46.30, the highest levels since March.

Investors focused on the number of monthly active users hitting 271 million, up 24 per cent when compared with the same period a year earlier.

Revenues meanwhile leapt to $312 million, and the market appeared to shrug off Twitter's widening loss at $145 million.

Youssef Squali at Cantor Fitzgerald called the financial results "very strong" and added that "what's more important is that the drivers for this growth seem sustainable, implying faster-than-expected growth and margin over time."

Ross Sandler, analyst at Deutsche Bank, said the quarterly figures appear to have calmed skepticism about Twitter.

He said that fundamentals for Twitter "are all trending in the right direction" and said the opportunity for the company is "under-appreciated."

After Twitter's successful public offering last year, the stock surged to over $70, but since then skeptics have wondered whether it can grow its user base and become profitable.

Daniel Ernst at Hudson Square Research nevertheless maintained his "sell" rating for Twitter, saying that "the platform is not likely as applicable to as broad an audience" as Facebook.

"While we see no obvious negative catalyst near term, expectations are rising and... Twitter in our view is grossly overvalued."

Twitter this week acquired the image search startup Madbits, moving to ramp up the ability to understand and organize what is in unlabeled pictures fired off in tweets.

Madbits put out word on Monday that Twitter has bought the year-old startup that specializes in automatically extracting "relevant information from raw media" such as images with no labels or tags.

"Understanding the content of an image, whether or not there are tags associated with that image, is a complex challenge," Madbits said in a post at its website announcing it was bought by Twitter.

"We developed our technology based on deep learning, an approach to statistical machine learning."

Madbits was preparing a public launch of its technology when it was bought by Twitter, the startup said. Financial terms of the deal were not disclosed.

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