Twitter wasn’t expected to hit the $1 billion revenue mark until 2016, but new sources are saying that number could come a good two years earlier than expected.
Super secret sources for Bloomberg say the microblogging network’s ad sales have led to internal forecasts that reflect a much rosier picture: $1 billion in sweet, sweet ad money by 2014.
This makes sense given the startup’s recent expansion into international advertising, which is likely bringing global brands and a very long tail of non-U.S. SMBs into Twitter’s fold.
Twitter also launched a self-serve ad platform earlier this year — a nice way for the startup to passively collect long-tail revenue from SMBs, local shops, and mom-and-pop businesses.
Twitter reps declined to comment on this news, so we can’t officially confirm the rumors are true. In fact, pretty much all the reports we’ve heard about Twitter’s revenue have been based on estimates or bold-faced speculation; what we do know for sure is that Twitter’s revenue plans are still very much in their infancy.
Still, Twitter execs are vague but confident on the company’s financial future.
“The health of the business is great,” said Twitter CEO Dick Costolo to VentureBeat reporters at a company event late last year. “I don’t think there’s anything else we need to do to make more money; the advertising business will sustain us.”
Still, that ad business has been fairly minuscule compared to what online giants Google and Facebook are pulling down. “I don’t think Twitter is in competition [with Google and Facebook for advertising budgets] — yet,” said eMarketer analyst Debra Williamson in a call with VentureBeat a few weeks ago. “It’s so much smaller in terms of the number of users. I see agencies primarily using Facebook and experimenting with Twitter as an adjunct.”
The one-billion mark is still a ways off for Twitter. By contrast, longtime heavyweight Facebook showed display ad revenue in the multiple billions for 2011 during its recent IPO filing, and Google showed more than $10 billion of mostly-ad-derived revenue for a single quarter alone last year.
But if Twitter is internally seeing a significant uptick in ad revenues and forecasts, we can likely point to big-name brands as the sponsors of Twitter’s success.
“Twitter’s revenue is going to need to come from the big advertisers, with a smaller base from small and mid-size advertisers,” said Williamson. “But [SMBs] are not what’s going to make Twitter ultimately successful.”
Twitter, which was founded in 2006, kicked around multiple business models, including analytics and enterprise products, before settling on advertising as its primary source of income. The company announced its ad suite just two years ago in April 2010. But the company wisely took its time in testing and rolling out its promotional products; for example, promotional tweets didn’t start rolling out in users’ timelines until last fall.
“The message we hear from brands and small businesses is they’re paying attention to Twitter as a marketing platform due to the level of engagement,” said Costolo. “And publishers are seeing that we’re driving a huge volume of traffic.”