September 9th, 2011
Twitter CEO Promises Big Advertising Growth
Twitter has imminent plans to expand its advertising efforts, according to CEO Dick Costolo.
Costolo talked about those plans today at an event that he called a “state of the union” to bring journalists up-to-date on the company’s activity since he took over as CEO a year ago. Brands can already pay for ads called Promoted Tweets (as well as other ad units), but until now, Twitter has only shown those tweets to people who already follow an advertiser’s account. Now the company is removing that limitation, Costolo said, which will allow tweets to reach a much broader audience.
That doesn’t mean Twitter will soon be covered in ads. The service has so many people (100 million active users) and so many tweets that it can show “a super-small volume of tweets to any active user” and still create “monumental” ad inventory, Costolo said.
More broadly, Costolo said the company is entirely focused on advertising as its business model. That doesn’t mean Twitter plans to stop making money by licensing its data, but there are no plans to grow that revenue, he said, because advertising is how Twitter will become “a huge, independent business.” To that end, Twitter is adding the ability for advertisers to target a specific geographical area, and it also plans to experiment with a self-serve platform for advertisers to launch campaigns without going through the company’s sales team.
Costolo also talked about Twitters’s sometimes-complicated relationship with startups who develop apps and services on top of its platform. Earlier this year, Twitter published new guidelines for its developer ecosystem, where it urged developers to shift their focus from building consumer apps to other areas like data and analytics. Costolo said today that those guidelines may have been misinterpreted — the company wasn’t trying to crack-down on consumer apps. Instead, it was saying there are “plenty” of Twitter consumer apps already, and pointing to other, more promising opportunities.
To help build that startup ecosystem, Costolo said Twitter plans to host quarterly sessions connecting Twitter developers with venture capitalists.
So with all that activity, does that mean we can expect an IPO soon? Costolo said Twitter wants to be in “control of our own destiny,” rather than rushing to go public within a certain financial window. That, he said, is why Twitter has recently raised $400 million in new venture funding, so it now has “a truckload of money in the bank.”
“We want to be able to remain independent and not beholden to the public markets until we want to be,” he said.