It is tough to remember a world without Twitter. The micro-blogging social network platform has grown since its establishment to become an integral part of modern life. Hardly would you find a facet of contemporary life that is not impacted by the social media platform in one way or the other. As a result, since its creation, Twitter has grown in net worth, becoming one of the most valuable companies in the world.
In this article, we examine how much the company is worth and how it has leveraged its global popularity to become a successful business.
How Much is Twitter Worth?
Twitter, the micro-blogging and social networking website which started as a text messaging service in 2006, has grown in worth to $19.75 billion, based on the value of its market capitalization, according to Forbes Magazine. The company’s market capitalization is down to its share price of $25.29 as of March 2020.
However, according to an analysis of the company’s revenue and profits, GoBankingRates places the worth of the company at a more conservative $4.4 billion.
The company is the brainchild of Jack Dorsey who got the idea while he was an undergraduate student at New York University. The initial development of Twitter started with Jack Dorsey and Noah Glass, and they launched the website to the public on the 15th of July in 2006.
Unlike Facebook, one of Twitter’s competitors in the social media industry, Twitter had a slow start. It wasn’t until South by Southwest (SXSW) in March 2007 before the company began to gain public traction. After the event, the social media company went from an average of 20 thousand tweets per day to 60,000.
By 2008, Twitter was becoming a popular and widely used tool, with more than 100 million tweets posted per quarter, rising to 50 million tweets per day in 2010. Before the year was over, Twitter had grown its usage to more than 65 million per day and by 2011, it was officially the third highest-ranking social media platform in the world.
The rapid growth of Twitter earned it a title as one of the fastest-growing companies in the world. As of 2020, it has 330 million active monthly users, and about half of them (145 million) are active daily users. This level of popularity and usage has made it one of the tech world’s most valuable companies.
Twitter’s accelerated journey to a net worth of $19.75 billion began in 2013 after its listing on the New York Stock Exchange. The company went public on the 7th of November 2013 and had a value of $31 billion with a share price of $44.90 at the close of its first trading.
At the end of the 2019 fiscal year, Twitter’s worth is a result of more than 330 million monthly active users, as well as a $10.16 billion in total assets, total revenue of $3.46 billion and an operating income of $366 million. The company also has more than 3,900 employees.
According to Alexa Rank, Twitter is the 12th most visited website in the world. Since its establishment, it has expanded its service through the acquisition of several companies like Vine, MoPub, Magic Pony, Niche, and several others.
How Does Twitter Make Money?
Twitter makes the bulk of its money from advertising. Although it doesn’t have the extensive userbase of Facebook (1.59 billion), Twitter remains one of the most populated and active social media platforms in the world, which makes it an attractive destination for brands willing to advertise to potential customers.
Using the concept of ‘promoted tweets,’ similar to Google’s Adwords, Twitter makes more than 85% of its revenue from this avenue. Aside from promoted tweets, the company also offers promoted accounts and promoted trends, all of which take advantage of the social network’s structure by pushing brands and services to customers based on the company’s algorithm.
This business model yielded $28 million in 2010, rising to $106 million in 2011. By 2014, it had almost doubled its advertising revenue to $1.4 billion. As of 2019, Twitter had an advertising revenue of $2.9 billion, a figure that has undoubtedly contributed to the company’s overall worth.
Aside from advertising, Twitter also makes its money through data licensing. The company sells subscriptions of its public data to companies and developers willing to take advantage of it in analyzing or developing their product. It offers two subscription levels, enterprise, and premium, and in 2019, earned $466 million from data licensing.
Although it is not the company’s largest source of revenue, its sale of user data has stirred controversy regarding privacy in the wake of the 2016 US presidential election.
Other sources of income for Twitter include service fees made from users of its product, MoPub, which is an ad exchange service.