Micro-blogging website Twitter reported losses of $645 million (£496 million) during last year’s trading, with slowing growth in new subscribers considered a major concern.

The loss was anticipated by observers. Revenue is up steeply at the business, by 110 per cent to $665 million, but investment in growth and other expenses means a profit was never on the cards.

Despite pulling in 250 million users a month, Twitter has never made an annual profit and only started selling adverts, in the form of 'promoted tweets', years after its launch.

In a statement, the business said it would focus on user experience as well as improving its service for advertisers in 2014.

Analysts said the business, which floated on the New York Stock Exchange last year with a valuation of around $18 billion, needed to improve user engagement.

"Inevitably, the market is evaluating Twitter not in isolation but in relation to Facebook, which posted record quarterly results a few days ago," said Dr Sotirios Paroutis at Warwick Business School.

On Wednesday night nearly $6.5 billion was knocked off that value during aggressive after-hours selling of Twitter stock.