It seems that Twitter has been doing pretty well lately, as they’ve had a pretty nice second quarter.  With $312 million in revenues reported above what was estimated by financial analysts, most would say that Twitter is sitting pretty right now.  Just to add that cherry on top, Twitter is reporting that the amount of active monthly users are up 24% to a total of 271 million.

So what could possibly be the problem with this picture?  With revenues up and an increase in users, what issue could there be?  Well, according to the Wall Street Journal, it’s believed that “the share of users who never see advertisements on Twitter is accelerating, while growth of those who do see ads is shrinking.

Here is Twitter’s disclaimer on metrics in its earnings slides”

Our metrics are also affected by applications that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the users associated with such applications as active users on the day or days such contact occurs. In the three months ended June 30, 2014, approximately fourteen percent of all active users used applications that have the capability to automatically contact our servers for regular updates.

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So, in a nutshell, 14% of those counted in the 271 million, which comes to 38 million users, are actually using Twitter through other means than through Twitter itself, directly.  They are using clients and third party apps to tweet through.  Since you’re not seeing Twitter ads through those clients and apps, no ads will appear for those people.

WSJ says that this is a real issue because the user base is is increasing faster than Twitter’s core, “logged in” audience.

Stripping out the users who never see ads, user growth actually slowed to 3.9% from 4.4% three months earlier. Meanwhile, the growth of people who access Twitter through third-party apps accelerated to 24% in the second quarter from 17% in the first period. But Twitter gets no revenue from them because Twitter can’t serve ads in third-party apps.

To impound on the issue, the CEO of Twitter, Dick Costolo, says that there are hundreds of millions of users who are interacting with the content provided on Twitter, but are either not members, or aren’t logged in.

For more details on the story, check out the original post written by  on Marketing Land.