Twitter's competition is eating the company's lunch.
The social network said that in not so many words Tuesday when it forecast third-quarter sales of $590 million to $610 million, well below analysts' estimates of $678.2 million.
Twitter has failed to meet revenue estimates for the second quarter in a row.
James Martin/CNET
"There is increased competition for social marketing budgets," the company said in its letter to shareholders, "We're still priced at a premium CPE [cost per engagement] relative to others."
In English that means Facebook and Snapchat, among others, are getting a bigger share of advertising dollars, mainly because Twitter is a bit expensive.
Investors weren't too happy, sending shares down more than 11 percent in after-hours trading.
To attract more dollars, Twitter said, it plans to put greater emphasis on mobile video advertising. That ties into a recent deal to live-stream 10 NFL Thursday night games this season. In addition, Twitter has signed deals with the National Basketball Association to stream pregame shows, broadcast some games from the Pac-12 conference and live-stream Major League Baseball and National Hockey League games. Twitter will also be the home of a nightly sports-highlights show called "The Rally."
The hope is that the live-streaming events will propel Twitter, which had minuscule user growth in the second quarter. The social network saw its monthly active user total climb almost 1 percent, from 310 million to 313 million.
Meanwhile, Twitter's profit minus some costs, such as employee compensation, came in at 13 cents a share, 3 cents above expectations in the past quarter. And Twitter's $602 million in revenue also fell short of analysts' estimates of $607 million.
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