It's not a matter of if, but of when, Twitter offers an IPO. With the climax pre-ordained, the audience is now looking at every plot move as a step toward the eventual conclusion.
But to get there, even a company with a US$ 10 billion or so valuation -- like Twitter -- is looking to reach certain revenue goals. Rumors have pegged that target as US$ 1 billion in annual revenue, but that doesn’t seem feasible in the current calendar year. An eMarketer estimate predicts the company’s revenue will grow to US$ 950 million in 2014, from the projected US$ 582 million in this year.
Nearly every move by Twitter to increase and deepen its user base, especially active users, has been scrutinized in recent months for its effect on the pending IPO. Instead of the spurt-broadcasting model that made it famous, Twitter is in the process of becoming something that gets a bit closer to the Facebook model, even as Facebook borrows right back, such as by adopting hashtags.
For instance, the Conversations view announced by Twitter last week. It shows tweets and their responses as a threaded conversation, with the apparent intent of keeping users around longer as they participate or view what is a kind of conversational timeline.
Conversations are only one of a number of Twitter enhancements, including expanded tweets with blog posts, photos or video, micro-video sharing with Vine, Twitter Cards to attach media experiences connected to external content. Looked at one way, these enhancements heighten the communicative possibilities. Looked at through IPO-lenses, they increase the active user base and the possibilities for revenue.
Waiting for Third Quarter
Shuffles in the corporate executive suite are also being IPO-ized. For instance, late last week the company's chief counsel, Alex Macgillivray, announced that he was leaving the company for "various Internet passions from new and different perspectives," plus time with family and friends.
In its story on the departure, the New York Times noted that the new General Counsel, Vijaya Gadde, has extensive experience in corporate and securities law, and that Macgillivray’s championing of free speech rights had given him a stature among users and rights-watchers as the company faces increasing regulatory scrutiny and an impending IPO. Gadde’s financial expertise joins that of CFO Mike Gupta, formerly of Yahoo.
Bloomberg News, citing unidentified people “with direct knowledge,” has reported that the microblogging site has held initial talks with securities firms about a public offering, and is only waiting on third-quarter financial results before deciding whether to fire the starting pistol this year or in 2014. That’s a lot of stories till then about what this or that means to the IPO.