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)
