Details on Twitter’s IPO released, showing current revenue and plans for the future

Twitter BirdLast month Twitter filed a secret request with SEC to go public. Now the details of those filings are starting to emerge, including the plan they have to eventually reach $1 billion.

According to documents filed with the Security and Exchange Commission, Twitter has been gaining revenue at a very fast rate in the last two years. However, they are still losing money and have reported no profits.

Their ad revenue since 2010 has gone from $28,278 to 2013’s earnings of $253,635. While that is a steady increase over the course of that period, they have a long way to go to reach the eventual $1 billion revenue they hope to generate with their switch to public company.

Right now, Facebook holds the majority for advertising on the web. However, that is mostly through desktop specific ad sales. The mobile web market is wide open and growing. Already, Twitter has reported that 65% of their ad revenue is coming from mobile advertising and marketing. Which shows that the way forward is almost certainly going to be in that area, working to become the primary primary platform for mobile and tablet ads.

With all of this in the works, why are they actually losing money as far as profits are concerned? Mainly for two reasons: their expenses are increasing drastically as the site grows into a more internationally focused platform, and their mobile services globally are being threatened.

On the Asian market, that threat is especially real. Japan’s LINE and China’s Sina Weibo have strong footholds on the mobile market in those regions. Twitter may have a serious struggle ahead in both countries, especially China where the internet is so heavily regulated.

Potential shareholders in Twitter now have to decide whether it believes in the future of the company as far as advertising is concerned. Already a highly popular social network, Twitter is still far behind Facebook and has been overtaken by Google+ in active users thanks to Google’s connected services.

Source: WSJ

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