From that perspective, Twitter was wise to wait until the storm
around Facebook's botched May 2012 IPO cleared. Facebook's stock
price topped $45 last week, an impressive turnaround from last
September when it traded well below $20.
Twitter has already answered one question that dogged Facebook
in the run-up to its IPO: By eMarketer's projections, 53% of Twitter's ad
revenue will come from mobile this year.
Mobile was arguably the biggest perceived weakness in Facebook's
business model when it filed to go public, but it's turned into a
strength. Sales of ads in users' mobile news feeds made up 41% of
Facebook's ad revenue in the second quarter, and marketers are
hungry to be in front of its mobile-app users.
According to an August survey of 1,200 Ad Age subscribers done
in conjunction with RBC Capital Markets, 75% of respondents said
marketing on Facebook's mobile apps was "very" or "somewhat"
important, up from 67% in a similar January survey. Meanwhile, 56%
expected their Facebook ad budgets to grow during the next
Twitter's revenue growth since getting its ad business off the
ground in 2010 is still unknown. Its decision to file confidential
paperwork to the Securities and Exchange Commission for its IPO
under provisions of the Jumpstart Our Business Startups (or JOBS)
Act means that it's not obliged to reveal its financials to the
public until 21 days before its road show for potential
But even without knowing the details, its mobile-ad business is
clearly better-positioned leading into its IPO than Facebook's was.
Days before Twitter's filing, it bought mobile-ad exchange
MoPub for $300 million—its biggest
acquisition to date. MoPub will help Twitter generate ad revenue
throughout the mobile-app ecosystem.
And while Facebook reinvented its ad business in early 2012 --
introducing news-feed ads and essentially steering marketers away
from placements along the right side of the website -- Twitter's
core ad product has been served in users' streams since its
"The [promoted tweet] works everywhere because the user
experience is effectively identical everywhere," said Nate Elliott,
principal analyst at Forrester Research.
That continuity, along with its mobile business, puts Twitter in
a strong position relative to where Facebook started as a public
company. But Facebook was able to lean heavily on one strength as
it courted public investors that's an area of vulnerability for
Twitter: its user base.
Twitter claims 200 million monthly users, leading to the
perception that it's a niche property that will never gain traction
with a broad audience. By comparison, Facebook has 1.15 billion
monthly users and likes to make the assertion that one of every
seven people in the world use it.
revenue -- is the basis for an argument that Facebook's performance
doesn't have any bearing on Twitter. Facebook went public at a
valuation of $100 billion, while Twitter is expected to come in
between $15 billion and $20 billion.
CORRECTION: An earlier version of this article stated that
Twitter filed for an IPO last week. Though it publicly announced
via a tweet last week that it had filed, the actual date of the
filing with the Securities and Exchange Commission has not been
confirmed due to the confidential process in which Twitter
participated. We regret the error.