While there isn't much doubt that Twitter is playing ball in the big leagues, the microblogging service's management has confirmed they are currently counting just over 100 million active users. The company has likewise raised two rounds of financing worth US$ 400 million each.
The two-round $800 million series G financing involves "more money than I've ever seen before," says Twitter CEO Dick Costolo. Financed by DST, T Rowe Price, Chris Sacca and other investors, the financing has been split into two branches. One US$ 400 million lump sum is being paid to Twitter in exchange for preferred stock. The other US$ 400 million will be to buy out existing shareholders and employees who hold stock (to the extent that they can divest). The buyout values Twitter stock at about US$ 8 to US$ 16 per share.
Twitter's 100 million strong active tweeters are still nowhere near Facebook's claimed half-billion plus user base, although the company's management doesn't mind. Costolo takes pride in the fact that Twitter espouses a simple and straightforward interface. As such, it's not directly competing with Facebook -- not in feature sets, and not in numbers. Rather, Twitter's main focus is becoming a real-time information network rather than a social network.
What's All This Information Worth?
But while Twitter has a wealth of information in its hands, streaming at a rate of 55 million tweets per day, the question is how much value all these bits and bytes are worth. Twitter is currently monetizing its data through several means. For instance, the company licenses its "firehose" -- or tweets in its entirety, for anyone who would want to structure this data for their own needs. Twitter also monetizes data through marketing analytics. There have also been attempts to monetize the Twitter stream through ad messages that appear in between Tweets, as well as premium or promoted Tweets.
Aside from these, Twitter can still get more creative in earning from information streams. For one, due to the massive amounts of data passing through the service, there is a need to curate this information. Users are already using tools such as Zite and Paper.li to aggregate potentially interesting news tidbits from Twitter. The company can go far beyond curating information. It can harvest trends and partner with marketing or advertising companies to monetize this.
Twitter has grown past its adolescence and now has the resources to compete in the big leagues. It's just a matter of Twitter's management knowing how this will be done.