Twitter’s (TWTR) user growth will drop below 10 percent in the U.S. next year, and more than 40 percent of Twitter users will live in Asia in five years, according to a report published on Tuesday by EMarketer.
Slowing growth in the U.S. has been a concern since before Twitter went public late last year. It’s a major reason why the company’s stock is down about 60 percent from its December peak. While welcome, international growth comes with challenges: It’s much easier to make money from advertising in the U.S. than in the countries where Twitter is growing fastest.
By the end of this year, 32.8 percent of Twitter users will live in the Asia-Pacific region, even though EMarketer estimates no Twitter usage in China, where the microblogging service is currently blocked. Any inroads Twitter might make there would change the estimates significantly. According to eMarketer, India and Indonesia afford Twitter its fastest growth worldwide and are expected to grow 62 percent and 57 percent this year, respectively.
While U.S. users made up only about 22 percent of Twitter’s total user base last year, 72 percent of the company’s revenue came from the U.S. To measure how well it is converting Twitter activity into specific cash money, Twitter uses a unique, slightly murky metric called revenue-per-timeline-view; in the U.S., it made $3.47 per 1,000 timeline views; in the rest of the world, the figure was just 61¢. As Twitter has aggressively developed new ways to improve its advertising business, the amount of money it makes per timeline view is growing rapidly. The company has been talking up its push to increase ad spending from small businesses—especially internationally—with automated ad products.
Twitter isn’t the only company that finds itself in this situation. Facebook (FB) users in the U.S. account for 16 percent of the company’s total but account for 47 percent of its revenue. While 30 percent of Facebook’s users are in Asia, only 13.5 percent of its ad revenue comes from there.