Twitter: Working Swiftly On The Third Stage Of The
(2013-10-10 16:22:16)
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财经股票 |
分类: 公司 |
Vivek Gupta
Data source:
Business overview
The market is all set to welcome another social networking player, Twitter (TWTR). Twitter is the latest global social networking player that is moving ahead to tap the stock market, to raise a billion dollar. As most readers know, it is a social networking platform that allows its users to create, distribute, and discover content through tweets. But unlike other social networking platforms, there is a limit; Twitter wants its users to keep it short. Its users can't tweet more than 140 characters at a time; however each can contain rich media, including photos, videos and applications. The company's prominent competitors are Facebook (FB), Google (GOOG), LinkedIn (LNKD), Microsoft (MSFT) and Yahoo (YHOO).
Scale
So far, its users have created over 300 billion tweets. The company operates at a huge scale with over 215 million monthly active users (MAUs) and more than 100 million daily active users who create nearly 500 million tweets per day. Tweets also appear on over one million third-party websites and the company delivers more than 200 billion tweets per day to its users.
Growth till now
For the last few years, the growth rate of the company has been excellent:
- Monthly Active Users Growth:
Its MAUs have grown from 30 million in March 2010, to 218 million in June 2013 (see the chart below), which represents a CAGR of almost 76% for the last three years and growth of nearly 44% for the last one year.
http://static.cdn-seekingalpha.com/uploads/2013/10/12203431_13811531759740_0.pngWorking
- Timeline Views Growth:
The Timeline Views, which are the key indicator of user engagement, have grown from 89451 million in June 2012, to 150899 million in June 2013, representing a growth of nearly 68% for the last one year (see the chart below). The number of timeline views per MAU have also grown from 591 to 691 during the same period, representing a growth of nearly 19% for the last one year.
http://static.cdn-seekingalpha.com/uploads/2013/10/12203431_13811531759740_1.jpgWorking
- Revenue growth:
The revenue growth of the company is exceptional for the last few years (see the chart below), though the growth rate is coming down due to the rising scale.
http://static.cdn-seekingalpha.com/uploads/2013/10/12203431_13811531759740_2.pngWorking
The future growth potential:
As per the industry sources, as of 2012, there are an estimated 2.4 billion Internet users and 1.2 billion smartphone users. Twitter has just about 218 million MAUs, so there is huge untapped market and a lot of growth possibility.
Asset monetization:
The company is working on the asset monetization from April 2010, when it introduced the promoted tweets. After that, the company introduces various other ways of asset monetization like promoted tweets in timelines, promoted account, etc. (see the chart below). Effectiveness of these monetization efforts is evident from its growing revenues.
(click to enlarge)http://static.cdn-seekingalpha.com/uploads/2013/10/12203431_13811531759740_3_thumb.jpgWorking
Conclusion:
The company operates in social networking space, which still is a growing industry, particularly in the emerging markets, but the profitability in the emerging markets is considerably lower than the U.S. markets.
The company's MAUs-addition growth rate is slowing down and in the latest quarter the sequential growth rate touched a low of about 6.9%. Further, the MAUs-addition growth rate growth rate for the U.S. market, by far the most profitable market, touched as low as 2.1% (see the chart below). Though some slowdown in the growth rate is acceptable due to the higher base effect but if one compares it with Facebook, another social networking company, the growth rate comes down too early. When for the first time the growth rate of Facebook's MAUs touched single digit, its MAUs base was nearly 680 million (in Q2, FY 2011). Facebook even with a much higher base is still growing at above 4%. Though, the recent decline in growth rate may well be a temporary thing as the company may have been concentrating more on its monetization efforts, which reflects the the steep rise in the revenues.
(click to enlarge)http://static.cdn-seekingalpha.com/uploads/2013/10/12203431_13811531759740_4_thumb.jpgWorking
The company is not only improving its revenues but also is improving its average revenue per user (ARPU), considerably (see the chart below). In the last 24 months (as reported), its ARPU had grown at a CAGR of about 63.3%, whereas during the same period the ARPU of Facebook had grown by just about 13.9%.
http://static.cdn-seekingalpha.com/uploads/2013/10/12203431_13811531759740_5.pngWorking
For any social networking idea, there are three stages of progress: bringing the idea into realty; creation of an asset-base (user-base); monetization of the asset-base. Twitter brought its idea into the reality way back in 2006, and thereafter, it created a huge and fast-growing user-base, which now includes over 200 million users per month. And now the company is swiftly working on the third stage of the business development, asset monetization.
The company is showing a constant growth in the revenues and gross margins but still the company is a loss-making entity due to rising research and development as well as sales and marketing expenses, which fuels the company's growth and monetization efforts.
The offering shall create a lot of excitement among the investors due to the future growth potential of the company and the industry in which the company operates, though a lot will depend on the price tag.
Disclaimer: