Monday, September 12th, 2011
Eden Zoller, Principal Analyst, Ovum

Twitter reported more impressive growth this week but once again remained circumspect on exactly how well its fledging advertising business is performing. Twitter now has 100 million active users worldwide, an 82 per cent increase from the beginning of this year. It is on track to add a further 26 million by the end of 2011. Fifty-five percent of its active users are interacting with Twitter via mobile, a promising growth area for Twitter going forward.

Twitter also announced that it will be expanding its Promoted Tweets advertising model so that Twitter users will see promoted tweets from potentially any brand rather than just those companies they have selected to follow. This has the advantage of expanding the advertising reach but could annoy Twitter users if they are subject to Promoted Tweets from parties they have no interest in. Chief executive Dick Costolo says the existing model is doing well but without hard figures to back this claim it is not that reassuring – ‘exceeding expectations’ is tired fudge used by too many companies.

Despite its strong growth trajectory, Twitter is in challenging position. Costolo does not want to float Twitter until he has built a robust advertising business, which is understandable, but there is mounting pressure for Twitter to go public. But in order to buy time, keep shareholders happy and the advertising community prepped, Costolo needs be more transparent about how well the business model is performing rather than just quote stats, however good they may be.


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Twitter on track to add a further 26 million by the end of 2011.



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