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Twitter's got a growth problem, but it's bringing in ad dollars

Caitlin McGarry | Feb. 6, 2014
Twitter's very first quarter as a publicly traded company was fairly smooth, compared to rival Facebook--though to be fair, that was a low bar to clear. The microblogging service entered public life already swinging for the fences with mobile ad revenue, so it's no surprise that Twitter handily pulled in $243 million in sales in the fourth quarter of 2013.

But Twitter is working to boost ad revenue while not alienating its existing user base and attract more users. In the fourth quarter, Twitter introduced new types of advertising, like TV conversation targeting, tailored audiences, conversion tracking, and promoted accounts. The company said it's being selective about the ads it places in your Timeline.

The bulk of Twitter's fourth-quarter revenue, $220 million, came from advertising, 75 percent of which was on mobile. Twitter will continue to build out its ad products but also explore other forms of revenue, like the rumored commerce platform being headed by former Ticketmaster CEO Nathan Hubbard.

Costolo said experiments like the ones with American Express and Starbucks that let you trigger payment with a hashtag have been successful. He didn't offer details on when or how Twitter will roll out future buying opportunities, but you can expect Twitter's cards — the media that appear inside tweets — to be "the vehicle through which we think about commerce opportunities."

Maybe really good deals could draw new users in, thereby solving Twitter's pair of problems as a young company: customers and cash.


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