With user numbers stagnating, Twitter has made it clear that it can't simply make money from its existing users. It needs to monetizing those who view tweets without ever signing up for the service.
In a conference call following its second quarter earnings report last year, CEO Dick Costolo said that the company would "continue to highlight the reach, and impact, of Twitter across the mobile landscape and beyond our owned and operated properties.'
Now we have an idea of how the company is going to do that.
The social media company has a plan to sell advertisements within the streams of tweets that appear on apps and websites from other publishers, according to a report from the Wall Street Journal. Twitter reportedly laid out this initiative to media buyers in a presentation at the Consumer Electronics Show in Las Vegas.
Right now, there is no indication as to which publishers Twitter currently has any deals with, if any, but ESPN is being talked about as a potential partner, as is mobile media magazine app Flipboard.
As for the monetary side of the equation, Twitter and the publishers would share the revenue from the ads.
In addition, Twitter also revealed some of its plans to sell video on the site, including auto-play video in users feeds, in order to encourage users to upload more videos to the site. Apparently users would see six seconds of one of these videos, with the option to click to play the rest of the video in its entirety.
Gaining revenue from off-line users is becoming increasingly important to Twitter, as its user growth has stalled in the last year.
During the third quarter, Twitter saw its average monthly active users (MAUs) grow 23% year-to-year to 284 million, adding only 13 million since Q2, prompting Costolo to, once again, reiterate how the company needs to speed up monetization of users who are not on the site.
As a result of that slowdown, the company's stock took a pretty bad beating in 2014. The company started out the year trading at $65 a share, and ended the year at $35.87. At no point after February did it traded above $50 a share, and it was not been able to rise about $40 in the last month of the year.
Monetizing outside of just its user base is going to be key to showing investors that Twitter has long-term viability and the ability to grow its revenue.
Investors already seem encouraged by this news: the stock grew by 2.76% on Friday to end at $40.17, the first time it traded above that marker since November 28th.
VatorNews has reached out to Twitter for confirmation of this report. We will update this story if we learn more.
(Image source: mediabistro.com)
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The world's first social magazine. Flipboard is a fast, beautiful way to flip through news, photos and updates your friends are sharing on Facebook and Twitter.
Inspired by the beauty and ease of print media, Flipboardʼs mission is to fundamentally improve how people discover, browse and share content across their social networks.
http://www.flipboard.com/
http://twitter.com/flipboa rd
Startup/Business
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Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.
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