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 modern 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 $26.4 billion, based on the value of its market capitalization, according to Forbes Magazine. 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 at the time was an undergraduate student at New York University. The initial development of Twitter started with Jack Dorsey and Noah Glass. The website was launched to the public on the 15th of July, 2006 as an arm of Odeo, Twitter’s parent company.
Unlike Facebook, one of Twitter’s competitors in the social media industry, Twitter had a slow start, and it wasn’t until SXSW in March 2007 before the company began to gain public traction. 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, translating into significant net worth and one of the fastest-growing companies in the world.
Twitter’s accelerated journey to a net worth of $26.4 billion began in 2013 when it was listed on the New York Stock Exchange. The company went public on the 7th of November 2013 and was valued at $31 billion at the close of its first trading, after its shares closed at $44.90.
As of today, Twitter’s worth is based on more than 330 million monthly active users, as well as a $10.16 billion in total assets, revenue of $3.04 billion and an operating income of $453 million. The company also has more than 3,900 employees.
According to Alexa Rank, Twitter is the 12th most visited website in the world, and since it was established, it has expanded its service through the acquisition of several companies like Vine, MoPub, Magic Pony, Niche and several others.
How Does It Make Money?
Just like Facebook, Twitter makes the bulk of its money from advertising. Although it doesn’t have the extensive userbase of Facebook, 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 targeted customers.
Using the concept of ‘promoted tweets’, which is similar in practice to Google’s Adwords model, Twitter makes more than 85% of its revenue from revenue. 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 potential customers based on the company’s algorithm.
The company generated $45 million from advertising in 2010, rising to $139.5 million in 2011. By 2014, it had almost doubled its advertising revenue to $250 million, and as of 2019, Twitter has an advertising revenue of $679 million, 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 to 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 $107 million in the first quarter of the year 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.