It plans to raise $1 billion when it starts trading on the New
York Stock Exchange.
But Twitter is incurring significant operating losses as it
rapidly increases headcount. (It had roughly 2,000 employees as of
June 30, up from about 200 at the beginning of 2010.) Twitter's net
loss increased 41% to $69.3 million in the first half of this year,
and, as of the end of June, Twitter had accumulated a deficit of
In its pitch to Wall Street, Twitter is emphasizing two metrics:
monthly active users -- which has become a standard way for social
media companies including Facebook to describe their audience size
-- and "Timeline Views," which is unique to Twitter. It's defined
as the number of timelines -- or streams of tweets -- "requested
when registered users visit Twitter, refresh a timeline or view
search results" on Twitter.com and mobile and desktop applications.
It's being used as a baseline to describe the growth of the ad
business, since most Twitter ads (i.e., promoted tweets) are seen
in people's streams.
Twitter said that its ad revenue per thousand "timeline views"
was $0.80 in April, May and June, up 26% over the same period the
One of the brightest spots for Twitter is its mobile ad
business. It reported that 65% of its ad revenue came from mobile
placements in the second quarter, which is almost on par with the
75% of monthly active users who accessed Twitter from mobile
devices during that period. By comparison, Facebook generated 41%
of its second-quarter revenue from mobile and said it expected that
share to be over 50% by year end.
Twitter said desktop ads fetch higher rates as "a result of
promoted accounts and promoted trends receiving less prominence on
International user base
One area with room for improvement is international, which hasn't
yielded much revenue in relation to its user base. Twitter reported
that of its more than 215 million monthly active users, 77% were
outside the U.S. in the second quarter, but international revenue,
based on the billing location of its advertisers, was only 25% of
its consolidated revenue for that period.
Twitter might have trouble growing its revenue abroad due to the
U.S-centric nature of its social-TV pitch to advertisers, according
to eMarketer's VP-communications Clark Fredricksen.
"On one hand, the rollout of self-serve in other countries will
help them get off the ground in places where they don't have direct
sales teams," he said. "On the other hand, international might be
difficult, particularly given how their pitch centers around the
size of the U.S. TV market."