Twitter announced yesterday that it is going public, filing a secret IPO request with the SEC that will turn it into an official business.
Since starting in 2006 as a side project for what was meant to be a podcast, Twitter has really made a name for itself. Not only was it the first highly popular micro blogging site, but it has had a hand in establishing a number of social media standards.
We can thank Twitter for the prevalence of the hashtag after it was adopted from IRC channels to connect posts. We can also look to their unique algorithm and live update format for the way many sites are run today. Even Google adapted their services for a time to better use Twitter prior to their Google+ launch. But mostly, it formed a new social element to the industry of online business and marketing that has changed everything. This move to go public is surprising in some ways, and not in others. It could be argued that it was a long time coming. Twitter has worked hard to establish itself as a global brand, and advertising has been increasing on the site in the last year in particular.
But it was only last year when Facebook made the same move, offering more than $160 billion in stock to investors. The worth of that stock almost immediately plummeted, and the losses were enormous. They stock was selling for less than half its original price, but now Facebook stock is high again.
What might make Twitter’s fate different is the amount of money they are putting into the venture. The paperwork filed lists the process as a secret IPO filing. That means, under the JOBS Act, that they must be coming forward with less than $1 billion in opening revenue.
Since they are using a confidential system, we won’t get any public financial details from the paperwork. But in addition to guessing at the revenue level they are starting on, we also know that their focus for this move is mobile advertising.
While Twitter has been a slow growing site in comparison to its competitors, and doesn’t yet have anywhere near the 1.1 billion regular users of Facebook, it is still a major contender in the social world. Marketers will be keeping a close eye on the site to see how they adjust their advertising campaigns during this process, which is sure to affect investors willingness to shell out for stock.
We will be keeping close watch to see how they do.
