Feeds

Twitter spills unprofitable guts in $1bn IPO filing

Loss-making babblechat service's S-1 chirps inner details

Providing a secure and efficient Helpdesk

Curt babble network Twitter hopes to raise $1bn in its initial public offering, according to the company's S-1 filing.

The company revealed on Thursday in an filing with the US Securities and Exchange Commission (SEC) that it is unprofitable, has racked up a deficit of $418.6m, and expects its revenue growth to slow further. But it reckons the simplicity of its 140-character micro-messaging tech means it has a shot at signing up a sizeable portion of the internet's population.

On September 12, the company announced it would file for an IPO, generating not only huge interest among investors, but also caution given Facebook's disappointing IPO.

The company claimed to have 218.3 million monthly active users as of June 30 of this year, up 44 percent from the same period a year ago. In the six months ended on that date, it racked up $253.6m in revenue, but had costs of $316.5m.

Twitter lost $79.4m in 2012 on revenues of $316.9m. This makes the company's ad biz a minnow compared to the 2012 revenues of rivals such as Google ($46.0bn), Yahoo! ($3.5bn), and Facebook ($4.3bn).

Twitter warns that revenue growth "will slow in the future" due to a "variety of factors" including a reduction in the incredible rate it has been acquiring users.

It also needs to make more money overseas, seeing as how in the three months ended June 30 of this year, 25 percent of its revenue came from outside the US, yet that is where 77 percent of its monthly active users reside.

It forecasts tough competition abroad from Asian social networks Sina Weibo, LINE, and Kakao, and from the usual suspects Facebook, Google, LinkedIn, Microsoft, and Yahoo! in its traditional Western stomping [Tweeting?—Ed.] grounds.

This will be complicated by a spike in costs in 2013 and 2014 because the stock it owes to employees "will have a significant negative impact on our ability to achieve profitability." Expect a disapora of techies weighed down with filthy Valley lucre to emerge from Twitter and spawn a new round of startups.

During 2012, 85 percent of the site's revenue came from advertising – the rest came from data sharing and other deals – and this climbed to 87 percent in June 2013.

"We generate substantially all of our advertising revenue through the sale of our three Promoted Products: Promoted Tweets, Promoted Accounts and Promoted Trends," the company wrote.

Given the depressing effect mobile devices are having on the average price paid per advert, the company will need to diversify its money-spinning products or start slinging more ads at users.

Three-quarters of its active users and 65 percent of its advertising revenues come from mobile devices, the company said. The S-1 also claims that spam accounts represent just 5 percent of its userbase, though it does not precisely detail how it defines "spam".

Twitter was founded in 2006. At the time of writing Twitter cofounder Evan Williams held 12 percent of the company, followed by Benchmark Capital with 6.7 percent, other cofounder and chairman Jack Dorsey with 4.9 percent, and current chief Dick Costolo with a meagre 1.6 percent. ®

Beginner's guide to SSL certificates

More from The Register

next story
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.