Has Twitter Already Hit a Ceiling?

Twitter (NYSE: TWTR  ) has been on a wild ride ever since going public a few short months ago. The company sold off last month after reporting slower user growth. Twitter has now filed its annual report, and ad rates are also now heading the wrong way. The company has disclosed that last quarter, ad prices fell by 18% sequentially, the latest in a string of such sequential declines going back at least 7 quarters.

However, as the service has grown, this has been offset by the company significantly increasing its supply of ad inventory, which has prevented declining ad rates from hurting the bottom line. For instance, in the full year 2013, ads per timeline view jumped 327%, while ad prices fell 67%.

In this video from Friday's Tech Teardown, Motley Fool tech and telecom bureau chief Evan Niu looks at Twitter, and discusses why he sees it as a company that's still working out all the kinks in its pricing strategy. He also compares it to ad-based businesses Google (NASDAQ: GOOGL  ) and Facebook (NASDAQ: FB  ) , and tells investors which of the three he likes best today.

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