Twitter's IPO: Is It the Anti-Facebook?

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Oct. 4 (Bloomberg) -- Bloomberg West Editor-At-large Cory Johnson, senior West Coast correspondent Jon Erlichman and Contributing Editor Paul Kedrosky examine the numbers behind Twitter as the company seeks $12.8 billion in an IPO. They speak on Bloomberg Television’s “In The Loop.”

It is a social phenomenon, immediate phenomenon -- and media phenomenon.

It is a pretty big business.

They are doing it for a relatively new company, doing $4 million in trailing revenues.

They're also losing money.

The operating loss of the businesses over the course of the last year, on hundred million dollar loss.

-- $100 million loss.

What is interesting is how many users they have and user growth.

The company has amassed 800 and -- 118 million users as of the last full quarter.

That growth rate is slowing dramatically.

The growth in users has come off from when they were growing over double-digit growth in recent quarters.

It is down to six percent growth.

A slowing growth rate but a big business.

A slowing growth rate, a business.

Perhaps big potential.

John, i want to bring you in on this.

Twitter is the most anticipated tech ipo since facebook.

Tell me how they compare.

Twitter has been in the bathtub stage.

A lot of people have said you turn on the faucet and away you go.

It is explosive growth in their sales in 2010 when the revenue is less than $30 million.

The company is now on track to generate more than half a billion in revenue this year.

It is a big change.

Investors are going to say is facebook a better bet than twitter?

You can see the estimates on facebook are north of $7 billion.

I think at the end of the day there are similar questions to the facebook story.

But can twitter find better ways to generate advertising revenue?

Admittedly twitter says overseas they have to do a better job at grabbing some ad dollars.

Collect the majority of their businesses in the united states.

Paul, you are an investor and venture -- what was the big picture you got?

I'm characterizing it as -- characterizing it as a midwestern filing.

There is no set of the ranged founders changing the world with -- there aren't multiple classes of shares, which is also a good thing.

Have staggered directors.

I think that is more about control than anything else.

All in all this is a very straightforward filing.

It is carefully engineered to be the anti-facebook.

It could be if -- it could be a straightforward presentation.

I don't think it should scare anyone off in terms of being a public company or be reluctant -- or be reluctantly public.

My main takeaways this is a company that is trying to do things right.

As paul speaks i think back to the facebook roadshow when they did this really -- they did with video that had a lot of heart and was about what facebook is and has become.

They be twitter is going to have a roadshow -- maybe twitters going to have a roadshow video as well.

What is engagement?

What am i getting for what i am paying for?

There is probably going to be a lot of explanation about the show.

Probably less six relation on what those filings are.

If you look -- if you -- if you retweet something, you're paying various rates that can be anywhere from a few cents to a few dollars for engagement.

I think there's going to be a lot of questions about that.

For advertisers this is the key question.

The key to growth for twitter in the advertising revenue, cori when you were going through all this the bottom line is twitter a growing company?

Clock's certainly user growth is growing.

Is it the revenue -- the revenue per user is increasing dramatically.

While the user growth is slowing, the revenue for user is increasing.

They are making some money off of it.

They're losing a lot of money.

As they start to sell ads to those users, using the user base as a way to create an advertising model, you can see them improving over the course of the last 18 months.

On both of those points, the increase in revenue per user, it is not particularly surprising.

There just filing -- some companies cannot get it done ever.

The fact you can turn on a switch and the lights go out is a testament to the lightbulb.

What is the appeal of twitter versus facebook versus any other social network they are on?

What is the compelling reason to go on twitter?

Clicks google gets a higher -- google gets a higher cpm rate.

People don't go there to experience the joy of search.

You go to twitter to experience the joy of tweed.

You go to facebook to see what your friends are up to.

But you go to amazon or google because you want to find something.

As a result they are able to get much higher cpm rates.

Footer needs to have that level of engagement, that level of purpose and that's that level of purpose.

-- that level of purpose.

They're going after the td dollars.

They're going after people who want to be talking about conversations in real-time.

The entertainment companies and real big brands that want to be part of a short-term cycle of conversation, i think the big question is can they keep those at dollars more consistent?

Got that is true.

Paul?

I think this is the key.

Twitter has become the second screen of life.

They tweet while they are watching tv, while they are watching news events, advertisers are running commentary on everything that happens.

Thank you for joining us.

Paul kedrosky, our bloomberg contributing editor.

And thank you to jon erlichman and cory johnson.

Coming up, overload, the new health insurance exchanges.

What will that eventually mean for doctors and hospitals?

We are going to ask the man who worked on the plan.

Just because jobs day is canceled doesn't mean we cannot get a clear read on the economy, we have pimco ceo mohamed el- erian and roger altman from evercore.

And the former champ takes his

This text has been automatically generated. It may not be 100% accurate.

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