Twitter ad revenue set to double this year
28 Mar 2013
Twitter's ad revenue is expected to double this year, with the online messaging service delivering more more advertising to mobile devices in preparation for a highly anticipated initial public offering of stock.
Currently though, Twitter remains a privately-held company that prefers to keep its financial results to itself, leaving research firms tracking Twitter to try to figure out for themselves how well the 7-year-old company was doing. Their estimates factor in a variety of sources, including market trends, ad agencies and other industry data.
According to eMarketer, which made its latest educated guess in a report yesterday, worldwide ad revenue at Twitter would total $583 million this year, up from an estimated $288 million last year.
By next year, the micro-blogging service would be raking in nearly $1 billion from ad sales, according to the forecast. The figures do not include revenue that Twitter gets from licensing agreements that give other companies better access to its database of messages, or tweets.
Although there are those who do not agree with eMarketer calculations, analysts are in broad agreement over Twitter's revenue accelerating at an impressive pace.
According to commentators, the timing of Twitter's IPO was probably of even greater intrigue than the company's financial performance.
Twitter CEO Dick Costolo had repeatedly said that the company was not under any pressure to go public having raised ample financing from investors, including a $400 million injection from venture capitalists in July 2011.
Some analysts believe, Twitter's more aggressive pursuit of revenue could be a pointer to the management's attempt at producing financial results that would draw more prospective investors and push up the IPO price of its stock. They expect Twitter to file its IPO papers late this year, which could see stock market debut early next year.
Analysts believe it would probably be the most scrutinised IPO since last year's public listing of Facebook, which had failed to live up to the hype leading up to its float largely because growth had decelerated since the social network filed plans to go public.
The most recent quarter saw Facebook's revenue rise by 40 per cent from the previous year, and in the final quarter before its IPO filing, Facebook's revenue rose 55 per cent.