As Twitter prepares for an IPO, social networking brands are watching to see how the little blue bird fares. Similar to Instagram, which started rolling out ads recently, Twitter, too faces the issue of incorporating ads or some type of business model towards generating a profit.
According to their registration statement which was released Thursday, October 3, 2013, revenues for Twitter increased threefold to $316.9 million in 2012. However it had a net loss of $79.4 million. Twitter has 215 million monthly users and 100 million daily active users, whereas in comparison, Facebook has one billion users a month.
The difference however is that the main way people use Twitter, especially younger people is via their mobile phone. 75% of their monthly users Tweet via phone. 65% of Twitter’s ad revenues so far have come from mobile devices.
Twitter is becoming more popular among youth culture (see also our Fall Youth Culture Study 2013), but there are other social networking sites rising fast on the radar also and in particular, with certain leading-edge demographics.
The transition to see if Twitter can turn a profit is what everyone in the industry is now watching. Just as Instagram struggles with a similar probelem.
According to the registration statement, Twitter said, “We aim to become an indispensable daily companion to live human experiences.”
No on is quite sure of the timing of the offering, but predictions are for this fall. Twitter suggests it could raise $1 billion.