Twitter will be the second social network to file for initial public offering, after an announcement the company will be offering eighty million shares at a price of $17 and $20, going under the four word name TWTR.
The share price points at a value of $10 billion, quite a low estimate compared to what analysts pegged beforehand, some pointed at a possible $20 billion price-tag and the average price was somewhere around $12 billion.
Twitter may have reason for the rather conservative estimate, considering Facebook’s poor performance when they valued their company at $100 billion. Facebook has grown past its IPO price, but it took them almost a year to achieve this value, after a few months of losses.
Unlike Facebook, Twitter is currently not making any profit and last year they had an $80 million loss. They are projecting big things in the next few years, but currently do not have the revenue to actually pay their staff and servers, both growing everyday.
Twitter is looking at new revenue streams, Vine is an obvious winner but still has no real advertisement, even though we can see ways this can be implemented without the userbase getting angry, including Vine-based videos from advertisers that are promoted, similar to promoted tweets.
We have also heard about Twitter developing a TV service, we can place our money on some form of 6-second previews and Twitter may set up deals with content providers to sell the TV programs and movies with the short trailers.
Twitter has not had the best luck at moving into new markets, their music app, #Music, has failed to gain any traction and the company is looking to destroy the app before it becomes a detriment.
With 200 million active users posting 500 million tweets per day, Twitter is in a good position to say they are worth something, even if they aren’t currently making profit. It is all about the end goal for Twitter and with more integration and advertisement, they may become the media source for all types of content.