Billion dollar baby: Twitter unveils IPO details
Online giant’s coming out party set to be largest Silicon Valley IPO since Facebook
Indeed, its more established rival is borrowing a few pages from Twitter’s book, particularly in its approach to mobile advertising. Yesterday it announced an advertising initiative for its Instagram unit, which competes most directly with Twitter.
Since Twitter was spun out of a struggling San Francisco startup in 2006, it has grown to approximately 2,000 employees based in 15 offices around the world. It announced in 2011 it would open an office in Dublin.
Along the way, it helped create new ways for advertisers and corporations to reach audiences, from a “promoted tweets” model now replicated by Facebook and other internet platforms, to its “second screen” approach to encouraging real-time debate around television programs.
More importantly, it has helped redefine the nature of global communications, linking once lofty and unreachable politicians, celebrities and journalists with millions around the world.
Its staunch advocacy of free speech around the world - nothing other than direct personal threats are barred from Twitter - has helped it become an important avenue through which news and viewpoints are shared, from the first inklings of the US military assault on Osama bin Laden’s compound to Obama’s tweeting “Four more years” when he won re-election.
Twitter’s IPO has already drawn multiple comparisons to Facebook. When the world’s largest social network debuted, concerns centered around its inability to fully earn revenue off mobile users.
Twitter appears to have less of an issue with mobile. About 65 per cent of its revenue derives from mobile users, it said.
The service had 218.3 million monthly active users, on average, in the three months ended June 30th. Three-quarters of its monthly active users are considered mobile users, it said in the filing.
But Twitter managed only average revenue per user in the second quarter of 2013 of 64 cents compared to Facebook’s roughly $1.60, according to Reuters’ calculations.
Investors can still muster some cheer from Facebook’s revenue and profitability track. The social networking site pulled in $272 million in revenue in 2008 but lost $55 million, according to Facebook’s S-1 document. In 2009, it swung to a profit of $262 million after increasing its revenue nearly three-fold to $777 million. Facebook is now solidly profitable.
Twitter, which went through a period of management turmoil and internal strife in its early years, did not append a letter from the founders to the filing, unlike internet companies such as Facebook and Google before it.
Co-founder and former CEO Evan Williams is Twitter’s largest shareholder, with 12 percent of the shares, while co-founder and chairman Jack Dorsey owns 4.9 percent. Biz Williams, another co-founder, does not appear on the list of top shareholders. Current CEO Dick Costolo owns 1.6 per cent.
Among institutions, Benchmark and affiliated entities own 6.7 per cent of shares, while Rizvi Traverse Management, Spark Capital, Union Square Ventures and DST Global are each shareholders of 5 per cent or more.
Suhail Rizvi, the little-known head of Rizvi Traverse who has helped himself and his investors amass stakes in Twitter since 2011, would count among the largest institutional shareholders, according to sources familiar with its investments.
Twitter intends to list common stock under the symbol “TWTR.” Goldman Sachs, Morgan Stanley, JPMorgan, BofA Merrill Lynch, Allen & Co, Deutsche Bank Securities and Code Advisors are managing Twitter’s IPO.