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Many Twitter users don't tweet, finds report

A report by a firm that monitors activity on Twitter (TWTR) has found that many users of its service are not particularly active. Even worse, about 44 percent of all people signed up have never sent a single tweet. It turns out, most posting is done by few people.

According to findings from the analytics firm Twopcharts that were reported in The Wall Street Journal Monday, there are 974 million existing Twitter accounts, a number that seems at first to rival Facebook's (FB) popularity. However, most of these users are inactive.

In the last quarter of 2013, Twitter said that it had 241 million active users, defined as people who logged in at least once a month. That's less than 25 percent of the total, suggesting that Twitter has a churn problem. More evidence -- Twopcharts estimates that 542.1 million accounts posted a message at least once, but that only 23 percent have tweeted in the last 30 days.
Twitter tumbles: Slower growth scares away investors 02:09

Twitter is different from Facebook and many users value the service for information, not communication. But its a problem for the company if only a minority logs onto the service as often as once a month. Compare that to Twitter's major rival, Facebook, which claims 1.23 billion monthly active users as of the end of last year. For Facebook, active can mean many things, including clicking "like" on something hosted elsewhere. Even so, it's a significant difference.

Questions about whether Twitter is truly a broad medium or a niche service are key to the stock's valuation. Twitter climbed from its November IPO level of $26 to a high of nearly $75 in December. But then the stock started to decline and now has run into investor skittishness about the broader tech sector.

On Monday, Twitter opened at just over $40 a share, but the stock gained when the co-founders said they had no plans to sell shares when the post-IPO lock-up expires on May 5. Cantor Fitzgerald recently upgraded the stock from sell to hold.

Twitter, which told the Journal it doesn't comment on third-party data, still must find a way to improve its growth prospects if the stock is to gain from here. The May 5 lockup date is still cause for concern. Plus, Twitter will need to come up with new advertising formats to increase revenue and grow profits. And now, more than ever, it will need to show success with its efforts to encourage more activity by users, including posting real-time notifications when people react to a user's tweets and launching a new design that looks a lot like Facebook.
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