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Twitter scores by moving the goal posts

Matt Kapko | Aug. 4, 2014
Twitter is moving the goal posts and Wall Street likes the new numbers it sees up on the scoreboard. The company's monthly active user base grew 24 percent from the year-ago period to 271 million, but the actual reach of Twitter goes well beyond that, the social media company claims.

Twitter is moving the goal posts and Wall Street likes the new numbers it sees up on the scoreboard. The company's monthly active user base grew 24 percent from the year-ago period to 271 million, but the actual reach of Twitter goes well beyond that, the social media company claims.

"There are hundreds of millions of additional unique visitors who come to Twitter every month but don't log-in. When you consider the combination of monthly active users and unique visitors, the size of our audience on our owned and operated properties is two to three times that of just our monthly active user base, which we believe ranks us among the top-10 largest digitally connected audiences in the world," CEO Dick Costolo tells analysts following the release of its latest earnings.

"Make no mistake, our total audience and reach represent a significant opportunity and we will continue to invest in maximizing the size of our audience," he says.

Making that opportunity a reality has caused widespread turnover among the executive ranks of late, as Costolo retools the company for its next phase of growth. The company's chief operating officer, chief financial officer, head of product and head of media partnerships have all departed or been re-assigned over a matter of months.

Ad Team Avoids Revolving Door

Twitter's advertising team, however, remains mostly intact with Adam Bain, global president of revenue and partnerships, leading the charge. Revenue grew 124 percent year-over-year to $312 million and advertising revenue per thousand timeline views doubled over the same period to $1.60. Though net losses widened from $42.2 million in the year-ago period to $144.6 million, analysts and investors appear to be seeing more light at the end of the tunnel.

Company stock roared, jumping as high as 32 percent immediately after the social network reported its latest earnings, and ended the week with a market cap it hasn't seen since late April. Despite all the activity and newfound optimism in Twitter's future, the stock price is still hovering around the same rate it commanded at the time of its initial public offering in November 2013.

While Facebook slogged through 15 months of operations before it regained the value it enjoyed at the time of its IPO in May 2012, Twitter has reclaimed its IPO-level value in almost half that amount of time (or 8 months).

There's no doubt Twitter is gaining traction, but the pace of growth has remained steady for the past few quarters. The World Cup marked another watershed moment for the platform, but executives are carefully avoiding the temptation to raise expectations based on a global event of such magnitude that only comes around every four years.

 

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