As Twitter prepares its IPO, it is revealing more detail on its financials and performance. As online content/social media companies IPO, they have to convince investors of their plan for growth. Always that plan includes how they will monetize advertising. As with Facebook, when Twitter IPOs, advertising on Twitter will grow substantially in the coming years. They have began introducing different ad products such as promoted tweets, but now these ads will become more abundant and more important to driving growth and convincing investors of value. Unfortunately, now these companies look to please investors, which may be at the detriment of their users who will be interrupted with more advertising.
Twitter makes 87% of its revenue from advertising and a remaining 13% from licensing its data. Twitter identifies its audience through monthly active users and timeline views. Timeline views are unique to Twitter and mean the number of streams that a user requests when they visit Twitter. It's interesting that Twitter uses this metric, but Facebook does not for its news feed as one would think that this metric would be the same for both (and create some consistency in advertising pricing).
Hopefully as Twitter enters the public market, they can continue to find ways to remain profitable and grow their advertising business without inhibiting the user experience.
Source: http://adage.com/article/digital/big-reveal-twitter-s-ad-business-grows-losses/244564/
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