It is being told that Twitter, the 140 character social network is going public by November 15. The micro blogging site which has 218 million Monthly Active users (MAUs) in the last quarter is looking for a $1 billion filing, which would value the company at about $10 billion. Once the news started settling, the S1 filing revealed some bigger challenges that could impact the confidence of the market.
One such challenge today is generating revenue from foreign markets especially from the emerging markets like Asia. With China giving no access to Twitter and it having a similar service in the form of Sina Weibo, Twitter also feels that a market like India may adversely impact its business and results. The article reported at The Hindu, stated that Twitter’s inability to offer full features in markets like India will have a considerable impact.
Yet to be a profitable company, Twitter has reported that 77 per cent of its average MAUs during the last quarter were based outside the US, but its international operations accounted for only 26 percent of its consolidated revenue.
Twitter expects this disparity between the US and global revenues to continue due to the competitive landscape in other countries, advertiser demand, differences in the digital advertising market and differences in the way its users outside US utilise the services, among others.
While talking specifically about India, where it has been pushing hard to influence marketers in trying out its premium products, it has revealed that users access the company’s products and services through feature phones with limited functionality, rather than through smartphones, the microblogging site or desktop applications.
“This limits our ability to deliver certain features to those users and may limit the ability of advertisers to deliver compelling advertisements to users in these markets which may result in reduced ad engagements which would adversely affect our business and operating results,” said Twitter.
Penetration of Twitter in the country is still at a very nascent stage and the mass is still missing which has been the biggest problem for the company. But what surprises me is that the country has been the third largest country after smartphone in terms of smartphone shipments after China and US in Q2, 2013. Considering Twitter is still not mainstream then why would a niche access the network from feature phones when there is no big incentive to do so!
Twitter has been quite open in shedding its challenges from losing user attention to sudden rise of messaging apps, among others. However, Twitter has been making a positive move in the country from pushing itself as a second screen to tying up with celebrities and getting their tweets on feature phone for free without any data packs. Besides, as reported earlier in the day, Twitter’s tie up with Airtel Digital to get live tweets on the idiot box are some of the ways the company is trying to overcome the challenges in the country.