Investors punished Twitter as new account growth and user engagement rates disappointed. This was in direct contradiction to other social media companies like Yelp and Facebook that have reported strong revenue growth as well as higher adoption rates. What's going on with Twitter?
First, let's be clear that Twitter's basic model is all about capturing market share. And, after this capture is complete, they hope to monetize their user base through advertising. And what does advertising success mean? It means capturing data from your users and targeting ad dollars in the growing mobile space. If you distill social media down to one basic business premise, that's what these companies are trying to do — capture eyeballs that are sticky and sell stuff to users.