Robust Mobile
Twitter also disclosed that a majority of its revenue derives from mobile advertising, an area where rivals have struggled. In the three months that ended in June, more than 65 percent of Twitter’s ad revenue was generated from mobile devices. Facebook said in July that mobile accounted for 41 percent of revenue in the second quarter, up from 30 percent the prior period.
Twitter posted a net loss of $69.3 million in the first six months of 2013, compared with a net loss of $49.1 million in the same period a year ago. The company said that as of June 30, it had incurred an accumulated deficit of $418.6 million.
“They have clearly built their business from the get-go in the direction of where users are spending time, which is on their phones,” said Clark Fredricksen, vice president at EMarketer Inc. in New York.
Risky Business
The company included 32 pages of risk factors, compared with 22 pages in Facebook’s IPO filing last year. Among those are Twitter’s dependence on U.S. advertisers, even as more than three-quarter of its monthly active users are located outside the country. Twitter also cited stiff advertising competition, the company’s youth, and even earthquakes as risks.
One challenge lies in expanding the site’s user base. In June, Twitter had 218 million monthly users, up 44 percent from the year earlier. That was slower than its 78 percent growth the prior year.
Twitter’s average revenue per user in the latest quarter was 64 cents based on its monthly active users and $139.3 million in sales. That’s less than half Facebook’s $1.60 average revenue per monthly user.
War Chest
The IPO gives Twitter’s backers and early employees a chance to cash in shares, and will supply the company with a war chest to use on acquisitions and international expansion. The funds will also help the company forge stronger ties with advertisers and media businesses who want to reach Twitter’s growing audience.