Twitter. It’s our favorite conundrum here in Internet Media Land, isn’t it? On the one hand it’s changing the world and growing like crazy, with more than 200 million users who generate 155 million tweets a day. The services handles tens of billions of search queries a month, putting it on scale with some of the most elite platforms in the world. However, only a fraction of its users are also active creators of content; most are readers and followers – and that’s where Twitter can be confusing*. If Twitter is to truly scale, it needs to become a more compelling media experience. Further, Twitter’s initial foray into advertising products, its “Promoted Suite” of services, are garnering some mixed reviews, mainly for a lack of scale, though the company tells me it engages with 600+ advertisers who have run 6,000+ campaigns to date.
The company is openly self critical of its shortcomings, and knows it has work to do to make its service less opaque and more valuable to both marketers and users (not to mention developers, who have been scratching their collective heads of late, wondering how best to create value in the Twitter ecosystem). In March the company welcomed co-founder Jack Dorsey back into an active product role, and just this week it acquired TweetDeck, a respected third-party developer which had created a custom interface for advanced Twitter consumers.
And perhaps no question has dogged the company more than this one: When and how can Twitter make money? The issue is further freighted by staggering valuations in the private secondary market, which have wrapped a multi-billion dollar valuation albatross around Twitter’s still slender neck. The successful IPO of industry bretheren LinkedIn and Yandex, and the expected success of Pandora only heighten expectations for the young company.
Perhaps, given all this, Twitter doesn’t need to be profitable to have a successful initial public offering, but it certainly has to show numbers that prove the company is on its way. The man responsible for that job, Adam Bain, will be sitting down with me on day one of the sixth annual CM Summit in two short weeks.
Early revenue estimates are encouraging – eMarketer estimates $45 million in 2010, and more than triple that this year. But it’s expensive to maintain the infrastructure – and staff – needed to keep Twitter running. At least Bain has experience in both. He came to Twitter from Fox Interactive, where, among many other things, he helped lead the acquisition of MySpace and build out a scaled revenue platform across all of Fox’s online properties.
So it’s fair to say we’ll be having a robust conversation at the Summit. I’ll be asking about all this and more, and I’d love your input as well. If you have a question you’d like me to ask Adam, leave a comment here or join the conversation on the #CMSummit hashtag. See you in New York!
Oh, and PS – Register today before we sell out. It’s getting close!
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*I’ll be writing a longer post on this soon, for one take, check VentureBeat.
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Here’s two:
Twitter seems to be most appropriate for advertisers that are performance-driven. What are your plans to create ad types that appeal to brand advertisers, such as rich media or video?
We’ve been hearing bits and pieces about your self-serve ad platform for several months now. What’s taking so long for you to roll it out, and what are your goals with it?
I won’t be able to make it to the conference this year – bummed to miss it!
Thank Debbie, great questions, so sorry to miss you this year. Send someone in your place!
Calling an automatic, machine-repeated, connection to another user’s time line or a hashtag topic “searches” makes twitter’s “searches” number complete gibberish. Twitter doesn’t even have a decent feature to search for its own users! “Google the person’s name and add twitter to the end” as one of their founders once said.
The 200,000,000 “user” number is suspect as well. 200,000,000 ACCOUNTS, sure. That’s not active users. Even only a (unknown) fraction of the active accounts are humans.
With all the legitimate success twitter has had, there’s no need to exaggerate. But hey…don’t tell anyone at T. Rowe Price or any of the other investment houses holding twitter paper.
Dan makes a great point about Twitter’s user base. Once you add in dupe accounts, business accounts, RSS feed accounts, etc., the total number of actual users gets a lot smaller — there are about 20.6 million adults in the US, eMarketer estimates.
John- I’m sending my colleague Kimberly Maul to the conference; she’s on my team and based in New York. Catch you next time.
I am very new in this social media line, but love to read this kind of blog. As you mention about Twitter this year revenue, I wonder that this is not a very high amount of revenue they are getting inspite of the services they are provided. Thanks.