Twitter makes money for first time ever

NEW YORK -- Twitter made money for the first time in its nearly 12-year history, a milestone satisfying investors in the short term but not resolving the company's broader problems any time soon.

The company is still struggling to get people to sign up, despite the attention President Donald Trump's no-holds barred tweets have drawn to the service. One problem: Anyone can read tweets without signing up. As a result, Twitter's user base pales compared with Facebook and the Facebook-owned Instagram, meaning fewer advertising opportunities.

Twitter also has been dealing with policing hate speech and abusive comments, fake accounts and attempts by Russian agents to spread misinformation. Every time Twitter tries to respond to a problem, it's either not good enough or some other problem emerges.

Add a revolving door of executives, including an influential chief operating officer leaving after Thursday's earnings report.

Twitter said it had an average of 330 million monthly active users in the final three months of last year, unchanged from the previous quarter and below Wall Street's estimate of 333 million.

By contrast, Facebook has 2.2 billion, and Instagram has more than 800 million.

Twitter hadn't turned a profit until now because -- competing with Facebook, Google and others for digital ad dollars -- it didn't attract enough advertising revenue to make up for its expenses. But it's been cutting costs and focusing on new revenue streams, such as live video.

In some good news, the company grew revenue by 2 percent to $732 million in the final three months of 2017. Its net income -- a first -- was $91 million, or 12 cents per share.

The San Francisco company's stock jumped $3.27, or 12 percent, to close Thursday at $30.18. It peaked during the day at $35, its highest level since 2015.

The quarter "was a breath of fresh air for investors that have patiently awaited for this turnaround story to manifest after years of pain," said Daniel Ives, head of technology research at GBH Insights.

Nonetheless, Twitter has big challenges ahead. Connor said while investors don't want to micromanage Twitter, they at least want the company "to show that there is a level of management and governance on the senior level in place willing to address these issues."

While Twitter is well-known, it remains difficult to use, making it difficult for the company to explain to people why they need it. Twitter also has an "image problem," Wedbush analyst Michael Pachter said in a recent research note, "as it has been slow to act on harassment and other hostile behavior."

The company has enacted a slew of new policies, and Pachter says this renewed focus should help. But enforcing them will be a bigger hurdle.