Twitter CEO says 80 percent of advertisers renew
PALOS VERDES, Calif./SAN FRANCISCO
PALOS VERDES, Calif./SAN FRANCISCO (Reuters) - More than 80 percent of the companies that advertise on Twitter renew their marketing efforts on the microblogging service, the company's chief executive said on Wednesday.
But while the Internet company is focused on building an advertising-based business, CEO Dick Costolo said the company's future was not dependent on floating shares in an initial public stock offering.
Twitter's long-term success is not "correlated" with an IPO, Costolo said at the D9 conference, organized by the News Corp-owned tech news blog AllThingsDigital.
Investors are closely watching fast-growing social networking companies like Twitter and Facebook, in the hopes that they could become the next blockbuster IPOs. Last month, professional social networking site LinkedIn Corp made its debut as a publicly-listed company, with its shares doubling from their offering price on the first day of trading.
Twitter, which has more than 200 million registered user accounts, allows people to send short, 140-character messages and to follow the so-called Tweets of friends and celebrities.
On Wednesday, Costolo unveiled a new feature to make it easier for users to append photos directly in their Tweets, a feature which previously required using third-party software applications. Twitter also announced improved search functionality for the service.
Costolo said the company counts roughly 600 advertisers, up from 150 advertisers at the end of 2010.
While Twitter has stepped up efforts to build an advertising business, Costolo said Twitter was not under pressure to boost revenue.
"We don't need to optimize for short-term revenue," he said. Costolo declined to answer a question about whether Twitter was profitable.
Social networking services like Twitter and Facebook are increasingly challenging established online companies like Google Inc and Yahoo Inc as popular online destinations with web surfers and advertisers.
Twitter, which began courting advertisers one year ago, is still in the early stages of building a business. The company is expected to bring in about $150 million in ad revenue this year, compared with Facebook's roughly $4 billion in ad revenue, according to research firm eMarketer.
That hasn't stopped investors from making big bets on the company's future prospects.
In December, Twitter was valued at $3.7 billion in a $200 million funding round led by venture capital firm Kleiner Perkins Caufield & Byers. An auction of Twitter shares on the secondary market in March suggested investors were valuing the company at more than $7 billion.
Costolo is among the more than a dozen tech industry executives slated to speak at the conference, taking place this week at an upscale resort in Southern California. Other scheduled speakers include the chief executives of Walt Disney Co, Hewlett-Packard, Twitter, Zynga, Groupon and Alibaba.
(Reporting by Sarah McBride and Alexei Oreskovic. Editing by Robert MacMillan, Gary Hill)