It’s just been revealed that Twitter is currently gearing up to make the same jump that Facebook made in 2012—in the case of the latter, to rather erratic result. This week adocument presented last month to the U.S. Securities and Exchange Commission has come to light with all the details related to the IPO of the microblogging platform. Twitter is hoping to raise at least $1 billion with the Wall Street IPO, although the actual value of the company is not yet known. Below we review the key details of this million-dollar operation.
The numbers are dizzying: Revenues in 2012 topped $237 million, and in the first half of 2013 have already surpassed $184 million, translating to an annual growth rate that has been on a constant rise since the platform was born seven years ago. Some consultants have already ventured to put a price tag on the company: according to PrivCo, Twitter is worth $15 billion.
The firm’s profitability is a long way from the data Facebook presented when it was going public, which left the company with millions in losses after many of its value estimations proved off the mark. If the $1 billion that Twitter estimates it will raise with its IPO seems outrageous, keep in mind that Mark Zuckerberg’s social network was aiming to raise sixteen times as much.
Besides the obvious differences with regard to discretion and prudence when it comes to their operations, Twitter has a hugely important secret weapon: It’s the king of the mobile market. Of the more than 200 million active users that Twitter hosts each month, 75% use it from mobile devices, mainly iOS and Android, and even more importantly, 65% of its advertising revenues come from this type of platform.
Facebook, in comparison, had no revenues coming from the mobile market when it went public, and more than 50% of its users only accessed it from desktop or laptop computers. Nothing has come of its efforts to get Facebook Home off the ground for smartphones, which is completely at odds with the strategy followed by Twitter in recent months, with all of its operations focused on the potential of this growing market segment. Here we’re talking about services such as Vine or Twitter Music.
Our S-1 will be filed publicly with the SEC momentarily. This Tweet does not constitute an offer of any securities for sale.
— Twitter (@Twitter) October 3, 2013
Everything is moving around the mobile market right now. All the estimates of gurus and specialized consultants in the industry concur that the future lies in this type of platform, at least a priori. The market is in flux and the global spread of this type of services obviously entails a certain level of instability. From the Asian market we’re already seeing many alternatives to the dominant mass communication services, like the app Sina Weibo, a social network of Chinese origin with a market penetration that tops 30%—almost more than Twitter itself in its home territory of the United States—and that is now threatening to expand to other countries.
Everything points to the conclusion that the Twitter IPO will not be a repeat of the Facebook debacle. It’s still up in the air which bourse Twitter will choose for its IPO, although more likely than not it will be the NYSE rather than the Nasdaq. Looks like we’ll find out soon enough.