Has Twitter cracked the mobile market?


  • Share via facebook
  • Tweet this
  • Bookmark and Share

It was a week Apple executives would rather forget. A share price below $450 is not what CEO Tim Cook had in mind when he launched the iPhone5 last year, but after announcing lower-than-expected profits, the stock market verdict was brutal — wiping more than $50bn off the company’s market value.  Coming after the disastrous IPO of Facebook, the experts have been quick to suggest that the heyday for technology stocks may finally be over.

But drive exactly 61km up the road to the global headquarters of Twitter in San Francisco, and the mood is markedly different. The world’s largest media real-time micro-blogging website has evolved from a simple social media platform since its inception in 2006. Though not yet public, like Facebook, Twitter is well on that path after raising about $1.2bn privately from the likes of Prince Alwaleed, Jeff Bezos of Amazon and Benchmark Capital, among a number of other investors. In January, some of Twitter’s employees sold $80m in shares to a fund managed by asset managers BlackRock, according to the Financial Times. So what does that firm led by Jack Dorsey have that its social media competitors don't?

Though the company is highly secretive about its statistics and future, much like Google and Facebook, Greencrest Capital — a research and advisory company that assesses companies that have yet to go public — believes Twitter may list by the end of this year or in 2014. If true, that move would come after Twitter reshuffled part of its management at the end of last year, entered into strategic alliances with Nielsen, American Express and Pinterest, leveraged a strong mobile uptake of its site and expanded abroad. Some projections estimate the IPO could value the firm at  $9bn while Greencrest says the figure could be as much as $11bn and possibly more if the company manages to illustrate a propensity to reap higher revenue growth.

In one year the company doubled its user base to 200 million in 2012 (vs Facebook’s 837 million users) with about 70 percent of its users coming from outside the US and revenue reaching $300m. The company sees eleven new accounts created every second, according to Infographics Labs (that’s about 1m new users every day) and has recorded over 160 billion tweets since it was created. President Barack Obama’s tweet in November marking his election victory was the most retweeted of 2012.

While there may be a lot of sceptics out there after Facebook saw its valuation plummet, Twitter’s future will not only depend on supporting different types of users but also  on its ability to monetise itself as a real-time marketing tool across non-conventional platforms. That, for instance, means enabling companies to attract followers, as well as tracking and building their audience simultaneously, all the while being able to keep an eye on the competition.

While many have struggled to get people to click on ads on mobiles, the mobile frontier — on which many social network sites are focusing — appears to be an area Twitter has cracked. The company has reported a 75 percent year-on-year growth in mobile, putting it ahead of Facebook and LinkedIn’s growth, according to Greencrest.

If anyone had any doubt that the future of social media is in mobile, they should think again. Over 60 percent of Twitter subscribers use the site on their mobile devices, says Shailesh Rao, a former Google executive poached by the micro-blogging site to head up its international operations. Marketing on the site leads to between a one and three percent engagement rate, which is as much as 30 times better than traditional advertising, Rao says.

The company is believed to be reaping more from mobile ads than from ads placed on its traditional desktop website. In 2012, Twitter earned $135m in mobile ad revenue from the US market while Facebook recorded $339m and Google $2.2bn, according to eMarketer. Twitter’s projected mobile ad revenue is forecast to increase by about 85 percent this year and more than double in 2014.

Article continued on next page

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
UAE's role in the new space race

UAE's role in the new space race

In the last five years, the UAE has invested heavily in a bid...

An Instagram photo is worth a thousand words

An Instagram photo is worth a thousand words

Instagram has become the social media platform of choice for...

1
Fear and roaming in the Gulf

Fear and roaming in the Gulf

The Gulf’s telecommunications giants are once more pushing ahead...

Most Discussed