Behind the Twitter IPO: What's the Strategy?

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Sept. 13 (Bloomberg) -- Bloomberg senior West Coast correspondent Jon Erlihcman digs into the business of Twitter ahead of its IPO and how it looks to build revenue through mobile advertising. He speaks on Bloomberg Television's "Bloomberg Surveillance."

Yesterday on "bloomberg west" when the news hit, and it was terrific.

You have been adding up the math to find out what we know about twitter's business, because they don't have to disclose it.

The numbers are growing really quickly.

E-marketer put out estimates of where the business has gone the last couple of years, something like $140 million revenue in 2011 and this year they are expected to top 500 million, and then potentially next year a billion dollars which is a number we reported first before anyone else, the goal of 2014 , the year they could top a billion dollars.

It plays into the timing of the ipo.

The last few months, some of the acquisitions and key hiring, suggest they were going down the road.

But when i had conversations with my sources early in the year about what would be one of the key deciding factors, they talk about market conditions.

I am looking at the market.

I see the s&p up 18%, the nasdaq up 23%. facebook blowing both of those away.

Facebook is probably the most comparable company for the market to twitter.

So if marketing -- conditions are as such, the writing i guess is on the wall.

A good point about the timing and the run-up we have seen and facebook shares.

It is also interesting to look at what the future is for the company.

Is it just going to generate avenue from advertising or will it move the needle in terms of e-commerce?

Making a big purchase, the biggest in its history, moving into the advertising space the way it has not before.

It wants to own a certain market, but wants to own the market reserved for prime time television.

They spoke developed #recently to say, hey, we will also make a play for being relevant in prime time.

Twitter wants to be the place that gets a lot of real-time advertising dollars.

The market still is in a lot of ways and tangible, but they are trying to make the case.

You are our west coast stud.

Where do the deal could decide?

Is there some kind of coffee shop or pizza parlor where all the big decisions get made?

That's a good question, tom.

Jack dorsey has his favorite coffee shops, which is sometimes we try to follow these guys go around to see where they are going.

A lot of the work for the key revenue players has been on the road.

They are rarely in san francisco these days.

They are going out and getting -- it is very simple.

You've got to tell an advertiser, hey, we think you should be advertising on twitter.

And then they say, great, why?

You've got to spend some time and do the presentations and all of that stuff.

Interesting.

Jon erlichman, thank you so much.

That is an exclusive.

They are not out in san francisco, but out working.

A lot going on in cafes in power out so -- in palo alto . jeff mccracken, where do these deals happen?

I spent too much time in new york to really know what is going on in san francisco.

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

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