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Mon November 4, 2013
Twitter Ups Share Price Ahead Of IPO
Originally published on Mon November 4, 2013 5:42 pm
MELISSA BLOCK, HOST:
This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block in Washington.
AUDIE CORNISH, HOST:
And I'm Audie Cornish at the studios of NPR West in Culver City, California. We're going to kick things off this hour with All Tech Considered because much of my focus out here this week will be tech. In a moment, I'll introduce you to a Silicon Valley company that has revolutionized the way we watch sports on TV, but first, to the week's biggest tech story.
Twitter is expected to start selling shares to the public Thursday. In just a few years, the social media startup has made a lasting mark. It's been used to organize protests around the world. It's made careers, and ruined them. It's even changed the language. Think tweet and hashtag. And it's done it all in 140 characters or less.
So it's a powerful company, but can it become a profitable one? NPR technology correspondent Steve Henn joins us now. He's based in Silicon Valley and he'll be following Twitter's IPO all week. Hey there, Steve.
STEVE HENN, BYLINE: Hey.
CORNISH: So let's talk more about Twitter's pitch to investors. How is it promising potential stockholders that it will someday make them money?
HENN: Well, that's a great question. You know, when Google went public almost a decade ago, it's story to investors was pretty straight forward. It said it reached folks on the Internet at the precise moment they were searching for something. You'd type in, say, running shoes and that is a great opportunity for Nike or Adidas to buy an ad.
And it said it could prove that those ads work. Facebook's pitch last year was essentially that that company knows more about potential customers than you could possibly imagine. So if you wanted to target, say, male employees of NPR between the ages of 29 and 34, they could do that. Facebook also told potential investors and advertisers they knew, you know, all of your likes and your friends' likes.
Now Twitter is basically also in the business of selling ads, but unlike Facebook and Google, it doesn't reach billions of people, just a couple hundred million and it doesn't know every conceivable piece of trivia about its members. So its pitch to advertisers and ultimately to investors as well is really somewhat different.
Twitter's story is that it's created this enormous, almost entirely public conversation that anyone can take part in and that gives advertisers the ability to engage with consumers at key moments. So recently Twitter's begun selling ads in concert with television companies. So, say, if you're watching the Superbowl and tweeting about it, when that Doritos ad comes on the big screen, Doritos can hit you with a targeted ad on your second screen as well.
CORNISH: But this is not exactly breaking new ground and I mean, I like sports and I like to tweet. I don't always do both at the same time.
HENN: Right. And clearly, Twitter is still in the process of figuring this all out. The company has just over 200 million users and it earned $600 million in revenue last year. That is just a tiny piece of the online advertising business and frankly, it's a pretty small piece of the mobile ad business as well. The one thing Twitter's backers say is that it has this highly engaged audience of hundreds of millions of people, mostly participated on their mobile phones, and that, they argue, is going to be worth something.
CORNISH: NPR's Steve Henn. Steve, thank you.
HENN: My pleasure. Transcript provided by NPR, Copyright NPR.