The folks at Twitter, where every story can be told in 140
characters or less, must have known that the company's IPO
announcement would boil down to this: It's going to be the biggest
Internet IPO since
Talk about damning with faint praise. The Facebook IPO was seen as
a fiasco, at least until a couple of months ago when its stock
price finally started creeping up above the $30 mark, where it was
supposed to have started more than a year before.
It looks like Twitter is working to avoid that comparison.
In part, the company has done this with a series of strategic
acquisitions that shore up its position as an advertising platform
with a strong mobile audience, a social media company with a solid
multimedia presence, and even a reliable source of breaking news.
Part of it, let's face it, is dumb luck. When the company was
created in March 2006, its founders decided Twitter was the perfect
name for a service designed for "a short burst of inconsequential
information," in co-founder Jack Dorsey's words. They arbitrarily
decided that 140 characters was the maximum length that such a
message should be.
They envisioned Twitter as a timely, event-driven micro-blogging
site. They expected, or at least quickly recognized, the site's
potential as a "second screen" that was used with television during
favorite shows, sports events, and breaking news events.
But surely they didn't foresee in 2006 that a format of 140
characters or less would be peculiarly well-suited for reading or
text entry on a smartphone.
That got Twitter a smooth transition to the mobile world, and its
recent acquisitions have made it clear that the company's
management wants to make the most of it.
Just this week, Twitter announced that it had acquired MoPub, a
mobile advertising network, for a reported $350 million in
privately-held Twitter stock. The company is expected to
incorporate MoPub technology into its own advertising system to in
order to deliver advertising targeted to users' mobile history and
This type of real-time bidding exchange is
explained in depth
in a blog post by Antonio Garcia, a former Facebook employee and
creator of the Facebook Exchange ad system. Garcia calls it "the
ultimate culmination of the various ad technologies that have
grafted themselves onto the Internet in the past 15 years."
Also in 2013, Twitter acquired two social media analytics
companies, Trendrr and Bluefin Labs. Bluefin delivers "promoted
tweets," that is, messages related to commercials currently airing
on television, to users who are tweeting about that program.
Trendrr creates tools used by advertisers to track and evaluate
social media campaigns.
Other acquisitions demonstrated Twitter's eagerness to flesh out
its feeds with multimedia. Last year, these included Vine, a
micro-video social network, and We Are Hunted, a showcase for new
Now to what we don't know about Twitter's IPO:
The company submitted its IPO filing "confidentially," under new
rules that permit a filer to postpone releasing its financial
details until 21 days before it starts marketing the IPO.
That tells us only that Twitter hasn't yet reached the $1 billion
mark in annual revenues, the upper limit for claiming the
The research firm
that Twitter will reach $1 billion in global advertising revenue
next year, following about $583 million in the current year. It
says more than half of that revenue will come from mobile
advertising, despite the fact that the company had virtually no
mobile revenue in 2011.
We won't know much about the bottom line until those financial
documents are finally disclosed, but Twitter is believed to have
become profitable only last year.
Twitter officially claims 200 million active users, but
The New York Times
says it has seen
internal documents that indicate
it is approaching the 300 million mark.
The IPO is expected to launch at the end of this year or very early
) is expected to be the lead underwriter.
And that's about all we know right now, but it's more than Twitter
told anybody. The official announcement came in at less than 140
characters, complete with legal disclaimer: "We've confidentially
submitted an S-1 to the SEC for a planned IPO. This Tweet does not
constitute an offer of any securities for sale."
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