Top Stories
Top Stories

All is not well in Twitter land: Analyst Mahaney

Twitter's user engagement problem

Twitter reported quarterly earnings that beat analysts' expectations, causing its stock to rally, but not all is well in the land of Twitter, as Mark Mahaney, RBC Capital's lead Internet analyst, said on CNBC's "Squawk on the Street" on Friday morning.

"There's still a user engagement problem at the company ... they should be growing the user base faster," Mahaney said.

Twitter had 288 million monthly active users (MAU's) in the fourth quarter, lower than the 292 MAU's Wall Street expected. Twitter also only added an anemic 4 million users in the fourth quarter.

Read More Twitter, Google in deal to make tweets searchable

Getty Images

Twitter CEO Dick Costolo said Friday that problems with Apple's iPhone software were responsible for losing 3 million users, and a bug related to the way Twitter is integrated into iOS was responsible for the loss of over a million more users that Twitter does not anticipate getting back.

"This is the second or third quarter in a row in which we've have had some excuse for the sequential disappointment in (MAU) adds," said Mahaney. "We shouldn't have that, this company shouldn't have to rely on those kind of excuses."

Read More Twitter earnings strong, user growth disappoints

Let's not panic yet. Twitter generated an impressive $479 million in sales, a staggering 97 percent increase year over year. Twitter also announced a deal with Google that would show tweets in Google search results.