Bloomberg News

Twitter Global Expansion Increases Sales, Censorship Challenges

February 01, 2012

Jan. 31 (Bloomberg) -- Twitter Inc.’s international expansion may help fuel a threefold gain in revenue, even as it raises censorship challenges for the microblogging service.

Ad revenue at Twitter is set to rise to $540 million in 2014 from $139.5 million in 2011, according to New York-based research firm EMarketer Inc. Increasing popularity overseas will decrease the site’s reliance on U.S. advertisers. The percentage of dollars coming from the U.S. will fall to 83 percent in 2014 from about 90 percent this year, EMarketer said.

Twitter’s global reach also is forcing the company to adjust how it manages content. The site announced last week that it will add the ability to censor posts by country, rather than deleting messages for the whole world. In the past, if the government of a country asked Twitter to take down a post, the company had to do it globally. Even so, Twitter still won’t be able to operate in some nations, such as China, Chief Executive Officer Dick Costolo said at a conference.

“We would love for people in China to express themselves,” he said at AllThingsD’s Dive Into Media conference. “Under the current situation, that’s not possible.”

LinkedIn Corp., the top professional-networking site, also will see ad sales soar in coming years, EMarketer said. The revenue will grow to $405.6 million in 2014 from $154.6 million last year, according to the firm. The U.S. will account for 60 percent of LinkedIn’s sales in 2014, down from 68 percent.

Wider Net

Both sites are benefiting from advertisers casting a wider net for potential opportunities, looking beyond Google Inc., Facebook Inc. and Yahoo! Inc. Twitter has become a popular way for politicians, celebrities and executives to spread their messages. LinkedIn, meanwhile, helps marketers target professionals, who use the service to connect with colleagues and find new employment.

Political ads will be important to Twitter in 2012, said Costolo, who became CEO in 2010. He has sought to bring more of a business focus to the San Francisco-based startup, which once didn’t focus on revenue.

“We have figured out the business,” he said. “The advertising model is working.”

--Editors: Nick Turner, Stephen West

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net; Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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