TU Global: Twitter follows Facebook, plans to go public
What’s one thing the POTUS and Iranian Foreign Minister, Mohammad Javad Zarif have in common? A mutual dislike for the other’s political agenda? Well, besides that…they both have Twitter accounts.
Twitter seems so widespread and integrated into our daily lives, with members spanning every echelon of society.
A person who hasn’t really taken a look at the numbers would say that Twitter’s scope of influence is comparable, if not greater, to that of Facebook. I mean everyone’s on Twitter. (I’m not).
Which is why many of you will be surprised to hear that by the end of 2013, Twitter is expected to have only 260 million users compared to Facebook’s 1.15 billion.
Regardless, Twitter has decided to file for an initial public offering, which, for those of you who don’t know, will make Twitter a publically traded company on the stock market.
However, unlike Facebook’s recent move to the public market, Twitter is filing its IPO in a unique way that is indicative of its revenue.
The S-1 filing—which was made possible after the passage of the JOBS Act in April of 2012—allows companies with less than $1 billion in revenue (Twitter is expected to bring in $600 million by the end of 2013) to declare their intent confidentially.
This allows regulators to make sure the company is ready for the public market before executives begin campaigning to big investors and making their cause known.
Unlike Twitter, who announced its “confidential” filing on its own social media platform in a tweet, most companies who file an S-1 don’t make it known to the public.
Analysts have valued the company at around $10.5 billion and have predicted that the filing process should be finished sometime in December.
While it does hold true that IPO’s for already popular companies spur confidence within the tech startup world and can increase the value of the company itself, there are some downsides.
The first few deal with the internal affairs of the company: valuable engineers who had a big hand in building the company from the bottom up usually use an IPO as an opportunity to cash out and take their talent elsewhere.
It’s much easier to develop new features in a private setting where the stress of quarterly earnings doesn’t deter risk-taking experimentation. Twitter will likely see a major employee turnaround.
Many also foresee issues when it comes to generating profit from marketing companies who are used to dealing with platforms that have a much broader reach like Google or Facebook.
Twitter also faces issues in providing better filtering and ways for people of similar interests to connect, which also plays into the success of its appeal to marketing firms.
But Twitter, like any company raised in the Silicon Valley, has found ways and adaptations around boundaries in order to capitalize. The company has been working to better place its ads where users will actually notice them.
Additionally, Twitter is considering offering a premium that users can pay to get ad-free access.
Characteristic of other recent tech startups gone public is the company’s purchasing of other small firms like Bluefin Labs, Trendrr, and MoPub, all of which serve to collect and crunch massive collections of data about our interests and shopping habits or what we thought about last night’s episode of Breaking Bad to sell to marketing companies.
But besides the more efficient ways Twitter is developing to make billions off of the info it collects about you, it’s prioritizing its mobile front and customizing its approach for each carrier’s operating system.
They’re working to make embedded content like songs, files, pictures, Vines, more directly visible. Essentially having multiple forms of media on the page at once, similar to Facebook.
The new mobile apps are poised to give off a more crisp, cleaner and livelier vibe, incorporating more of the screen.
The soon-to-be billion-dollar micro blogging forum that has its origins as a side project of a failed startup, is trying to cement its rank on the Internet as an all-encompassing platform for media.
The task now besides proving the company’s legitimacy to the SEC, is to expand Twitter’s user base to a much more profitable scale.