Today Twitter did something we're not used to from the company, it showed some business savvy, with Twitter CEO Dick Costolo announcing the company's mobile strategy is working, and the company is predicted to be bringing in $1 billion in revenue by 2014. This was some particularly shrewd timing by the microblogging company because not only does it show Twitter's doing something right, but in light of Facebook's admitted failure to monetize its mobile offerings, suddenly Twitter looks like it has the smartest social media business strategy all along. That's a surprising turn of events because in tech business world, Twitter has never really been taken seriously as a viable business. A few months ago Gawker's Ryan Tate wrote a whole big takedown, calling the site the "World's Worst Tech or Media Business," which centered around some leaked financials that showed Twitter hadn't made much of any money for the last three years. That followed a Wall Street Journal story about Facebook's "slow road to IPO," a euphemism for its inability to monetize. But following Facebook's attempts at playing business, we're starting to see what it means to succeed as a company rather than just a popular-in-the-zeitgeist website. And from the looks of it, Twitter is looking like the social media company with both the social media and the business strategy parts figure out.
As more people get smartphones and as those magic computer pocket devices get faster and better and prettier, mobile devices are becoming people's primary Internet portal. People spend more time scrolling through phone apps than reading print, found a study from last winter. This Flurry data found that phone browsing has already surpassed time spent on the computer. Mobile is the future. Or, really the now. And wily little Twitter is monetizing it before anyone else. "We're borne of mobile," Twitter's Dick Costolo said at a conference hosted by The Economist. "We have an ad platform that already is inherently suited to mobile, even though we launched our platform on the Web and only started running ads on mobile recently." Twitter started offering advertiser promoted tweets for the mobile app last March. Only a few months in and its already working.
Twitter has a totally different advertising strategy than Facebook that seems to have advertisers excited rather than scared. "The marketers who have used Twitter’s advertising opportunities have been pleased,” Nate Elliott, an analyst with Forrester told Bloomberg in light of that $1 billion prediction. "Twitter’s going to be able to push forward and continue to make more money from it." A few months ago Bloomberg BusinnessWeek's Brad Stone cited these same happy advertisers, explaining that companies like Twitter's less alienating strategy. "The centerpiece of Twitter’s plans, what Costolo calls 'the atomic unit of our ad strategy,' is the 'promoted tweet,' a message from an advertiser that appears near the top of a user’s feed," writes Stone. "The message—Twitter was taking a more nuanced, user-friendly approach—resonated with ad executives," he continues. Twitter charges $120,000 a day for promoted trends which put brands among Twitter's most popular topics.
Users: Engaged, Growing and Happy
Twitter doesn't have the same explosive growth as Facebook, having reached 500 million users this March. But the other day it announced it hit the 400 million tweet per day mark, up from 340 million last month. Meanwhile, a recent poll found Facebook's engagement is falling, with people spending less time on the site. Perhaps that has something to do with Twitter's utility -- many use the site for news sharing and discovery. Or, as Bits Blog's Nick Bilton points out, Twitter hasn't abused user-data. "The company has never made its users’ private information public when it has introduced new features," he writes, pointing to a recent move where Twitter allowed users to opt-out of its recommendations, which required some sketchy snooping.
This article is from the archive of our partner The Wire.