According to eMarketer’s report, Worldwide Social Network Users: 2013 Forecast and Comparative Estimates, nearly 25% of people worldwide will be members of a social network this year. The study estimates that last year nearly 1.47 billion people worldwide were connected to a social network. That number is projected to grow 18% this year to 1.73 billion. By 2017, 2.55 billion people, or 35% of the world’s population, is projected to be connected to a social network. Twitter is one of the top contenders, although Facebook leads the pack. Below is an interesting infographic from comScore’s report, 2013: US Digital Future in Focus, courtesy wearesocial.net. While Facebook is a clear leader with 83% share of time spent on social media sites by the Internet-enabled population of the U.S., Tumblr.com was a surprising second position holder as of December last year with a 5.7% share. Pinterest came a distant third with 1.9% of the market, followed by Twitter’s 1.7% market. Professional networking site Linkedin was the fifth largest site with a 1.4% market share.
Twitter Improves User Engagement
Twitter has recently become more focused on monetization after years of exclusive focus on growth and user adoption. Besides monetization, Twitter is also working on enhanced user engagement. Recently it partnered with Vizify to enable users to make an instant highlight reel of themselves. Known as #FollowMe, users will be able to set to music their collection of important videos, photos, tweets, fans, and followings. The Twitter bio will help users showcase their profile in a more interesting way.
To improve tweeting capabilities, the company also upgraded its mobile offerings. Recently, it released an upgrade for its app for Android and iOS platforms. The upgrade comes with a useful feature of syncing up the read status on tweets across multiple devices. Twitter has also enhanced the search feature on the new app. Users can now view full bios of people they search for and will also recommend similar people whom they may like to follow. Additional features include the simplification of the photo upload and share option, geo-tagging of the user’s tweets, and even a quick preview of how the tweet would look like once completed.
Twitter also upgraded their security verification by introducing a two-factor authentication system which will ask for users to register a verified phone account and a confirmed email address. The system will help prevent hacking of user accounts.
All these steps will help Twitter improve monetization. Recently, the company announced plans to experiment with ways to customize advertisements. For users who have enabled access to Promoted Content, Twitter will start showing them ad from brands and local businesses that they have earlier expressed interest in either through online tweets or through offline purchases. The program will initially be launched in the U.S. to gauge its success.
Recently, Twitter acquired several startups as part of their acqui-hiring drive and to improve their product offerings. Last month, they announced the acquisition of local discovery startup, Spindle. The Boston-based Spindle team had developed the Spindle app which used social networks, time, and location to recommend places of interest, restaurants, stores, and events to its users. Spindle shut down their app following the acquisition. Terms of the deal are not known.
Twitter also acquired big data visualization startup, Lucky Sort. Portland, Oregon–based Lucky Sort is known for its navigation engine, TopicWatch. The engine helped visualize data to help users determine patterns in data streams to sift through reams of data in social media, government filings, news, and commentary in real time to find, summarize, and analyze any text-based content.
Earlier this quarter, Twitter also announced the acquisition of big data and large scale computing startup, Ubalo. Ubalo had developed technology that used simple ways of scaling code beyond single machines. Its platform let developers write code for multiple machines in the same way as they would for a single computer application.
Meanwhile, the market is convinced that Twitter will file for an IPO by the next year, even though Twitter has neither confirmed nor denied such plans. The wave of recent senior management hiring and shuffling has convinced the analysts of an IPO coming shortly. In May this year, Twitter hired ex-Morgan Stanley banker, Cynthia Gaylor, to lead its corporate development initiative.
Twitter’s detailed financials are not available, but analysts expect Twitter to earn revenues of $605 million this year and $1.1 billion by next year. Margins are not disclosed, but analysts believe that Twitter operates at very high margins of 30%-40%. At their current performance level, Twitter is estimated to be valued at $10 billion. Analysts believe that by the time Twitter goes public by next year, it will be worth $11 billion.