Twitter Focuses on Growing its Advertising and User-base, Not IPO

By Staff Reporter

Oct 10 2012, 12:44 PM EDT

Twitter seems to have no definite plans for an IPO.

Instead the company is concerned with attracting users and growing revenue through advertising, CEO Dick Costolo told a CNBC reporter last week. "He insisted he is not thinking about an initial public offering, and is under no pressure to do so, from investors or regulators," wrote Julia Boorstin on Sept. 26, in "Why Twitter Has No Plans to Go Public: CEO."

Nevertheless, the media likes to speculate, with multiple sources predicting that if the company does go public next year, the IPO will be one of the biggest of 2013. Bloomberg News predicted in an article today,"Avoiding Facebook fate is Twitter CFO's goal on way to IPO," "Twitter will probably be the biggest consumer-Web company to make a market debut since Facebook."

If and when it happens, will a Twitter IPO meet with the same difficulties as the Facebook IPO in May, which resulted in investors losing billions?

TechCrunch feels that Twitter is in a much better position than Facebook was. The microblogging site is ultra-easy to use, its ads will be less obtrusive than Facebook's, and advertisers will only pay for them when users interact with the ads, to paraphrase points made in an Oct. 6 article on the site, "Here's Why Twitter's IPO Won't Be As Rocky as Some Might Think," by Drew Olanoff.

According to initial research, Twitter reports that its targeted "Promoted Tweets" engage users at a much higher rate than traditional web display ads, with a 1-3 percent average engagement rate compared to a tenth-of-one percent, CNBC reported in August.

Further, TechCrunch feels that Twitter's unique 140-character mode of communication and its huge base of 140 million users creates a "Fourth Dimension that is part of the future of communication," which has television networks, "salivating over working with Twitter."

The San-Francisco based company, established in 2006, is forecasting at least $1 billion in sales for 2014, according to the Bloomberg article.

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