With Twitter's Adam Bain tweeting Aug. 27 that former Ticketmaster CEO Nathan Hubbard has been given desk space as its first head of commerce, speculation continues over the social media platform's further move into e-commerce and its anticipated initial public offering (IPO).
Hubbard, 38, will reportedly start at his new post Aug. 29 and will report to Bain, head of global revenue, according to an official announcement by Twitter Inc. spokesman Jim Prosser. Earlier this month, Hubbard gave up the reins at Ticketmaster, amidst parent company Live Nation Entertainment's $75 million overhaul of the concert promoter's online services in a quest to make it more user-friendly. Hubbard joined the company after Ticketmaster gobbled up a majority of online merchandising company Musictoday, where he served as CEo.
Hubbard's hire is the latest in moves by the social platform as it goes after new sources of revenue in readying itself for a potential initial public offering, targeting $1 billion in sales for 2014. Meanwhile, Twitter CEO Dick Costolo insists upper management is not focusing on an IPO. Still, the company is expected to hold a share sale in the short-term to aid in bankrolling its expansion and provide Twitter investor early birds with a way to realize financial gains on their holdings.
While Costolo may continue to brush aside talk of an IPO, he is at the same time quietly beefing up his c-suite, bringing finance veteran Mike Gupta on board, along with former Morgan Stanley executive Cynthia Gaylor to run corporate development. He also promoted Ali Rowghani to chief operating officer.
In statements surrounding the announcement of his hire, Hubbard confirmed Twitter's plans to offer new tools specifically for e-commerce, a market expected to grow to $370 billion in the U.S. by 2017, according to technology and market research firm Forrester Research Inc. After generating $231 billion in sales for U.S. retailers last year, Forrester has predicted e-commerce will grow by 13 percent to $262 billion in 2013.
In the Cards
Twitter recently added its Twitter Cards feature, an expanded type of tweets that include media-rich snippets of content. The company is expected to extract a percentage of every transaction carried out through e-commerce on it site. Though Hubbard has yet to confirm its approach, industry experts believe Twitter is likely to seek out merchant and payment processing partners rather than develop the services on its own, and attach purchasing options into its promoted Tweet ads.
Twitter is no doubt hoping online shopping will keep users on the social media platform longer, allowing it to gather more data on them, including likes and dislikes, online shopping habits and similar tidbits of interest to potential advertisers. In an earlier announcement, Twitter said it was working with research firm Datalogix Inc. to track when promoted tweets result in an actual sale at brick-and-mortar shops.
The payoff could be generous. eMarketer estimates Twitter's ad revenue will more than double this year, to $582.8 million, up from $288 million in 2012 ad revenue. By 2014, as it considers an IPO, revenue could climb close to $1 billion, with more than half of it coming from ads targeting mobile users. Tablet and smart phone advertising makes up roughly half of Twitter's advertising revenue this year, with mobile advertising expected to rise to about 60 percent of the company's ad revenue by 2015.
Meanwhile, social media competitor Facebook has announced it will roll out a mobile payment system allowing users to make purchases with just their Facebook login when visiting e-commerce mobile app partners.
In previous reports, online media AllThingsD has reported that clothier JackThreads will be the first merchant to use Facebook's new system, which will work by utilizing stored credit cards that Facebook already has in its system. Facebook has the credit card information from users purchasing games, advertising and other premium Facebook services. If all goes according to plan, Facebook will find itself in direct competition with online payment giant PayPal.