Online microblogging service Twitter displayed its intentions to take the company public on Sept 12, when it announced that it had confidentially filed the S-1 paperwork required to begin the process of an initial public offering (IPO) in the stock market. Fittingly, the announcement itself was made via a Tweet from the company.
A good deal of the information surrounding Twitter’s impending IPO is still secret. The date when the company will go public is still unknown, though it is now expected to be sometime in late November 2013. The company has also confirmed that it will sell shares using the name “TWTR.” Although it is difficult to predict the success of Twitter’s new venture, the public and media have displayed a myriad of opinions and reactions to the news.
Twitter has been steadily increasing in revenue, growing to $316.9 million in 2012 from just $28 million in 2010, as well as growing its user base. However, the company is also losing money quickly: its net loss for 2012 was $79 million, while in the first half of 2013 alone it already lost $69 million. Many believe Twitter has not established its strength as a business well enough to succeed. Wired’s Ryan Tate believes that the IPO is doomed to failure, citing Twitter’s increasing losses and calling the company “an anemic mess.” He adds that Facebook was in a much stronger position as a company when its IPO failed to perform well. Yet it is important to note that Facebook’s CEO Mark Zuckerburg said he believes Twitter is doing the right thing, and that he waited too long before taking Facebook public.
Marcus Wohlsen, also of Wired, has a different take on the situation: he thinks that the IPO will be good for Twitter, but bad for users. “The time couldn’t be better for Twitter to go public and ride the wave of Wall Street confidence in social media,” he says. However, once Twitter goes public, it will need to increase its returns by adding more advertisements into its service, alienating users who don’t want promotional content in their feeds. Jason Keath, CEO of SocialFresh.com agrees: “Your Twitter stream will start to look more like Facebook.”
Public opinion is mixed on whether Twitter’s IPO will succeed or fail, and Twitter itself has expressed trepidation. In its own filing, the company addresses the risks it will be taking, saying “If we fail to grow our user base, or if user engagement or ad engagement on our platform decline, our revenue, business and operating results may be harmed." Ultimately, it will be up to Twitter to find a successful and profitable balance between the demands of its users and those of its shareholders.