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Twitter CEO Costolo Says Investing ‘Heavily’ in TV

Twitter Inc. CEO Dick Costolo
Twitter Inc. Chief Executive Officer Dick Costolo continued to downplay the potential for an initial public offering. Photographer: Tomohiro Ohsumi/Bloomberg

May 29 (Bloomberg) -- Twitter Inc. Chief Executive Officer Dick Costolo said he sees television companies as valuable partners for its microblogging service and is investing accordingly.

“Twitter is the social soundtrack for TV,” Costolo said today in an onstage interview at the D: All Things Digital conference in Rancho Palos Verdes, California.

“We’ve decided to invest heavily in that,” said Costolo. “There’s a bunch of ways we can be complementary to broadcasters.”

Twitter is adding video content to bolster ad revenue in a bid to reach $1 billion in sales by 2014. Earlier this month, Twitter announced a partnership with the National Basketball Association to stream game highlights, as well as a deal with ESPN, a unit of Walt Disney Co., to show snippets from soccer matches, college football and other sports.

The microblogging site is also investing “quite a bit of money” in improving security in the weeks after hackers compromised the Associated Press account on the site, triggering a stock market decline, Costolo said. Last week, it added two-step authentication, which requires users to input a code sent via text message to a mobile phone in order to log in.

“We haven’t moved as quickly there as we would have wanted to.”

While Costolo has said that management isn’t concentrating on an initial public offering, Twitter is widely predicted to hold a share sale before long to fund expansion and give early investors a way to realize financial gains on their holdings.

IPO Question

Today Costolo continued to downplay the potential for an IPO, likening himself to a football player concentrating on making a big play while someone stands on the sideline asking him what he’s doing after the game.

“I’m in the middle of trying to run this business and build this business.” Planning an IPO is “not the way I spend my time thinking about the company,” Costolo said.

Earlier this month, the company hired Morgan Stanley managing director Cynthia Gaylor to run corporate development, adding an executive with 17 years of investment-banking experience.

Twitter Inc. was valued at almost $10 billion by one of its investors this month, up about 10 percent from a previous estimate.

To contact the reporter on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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