Twitter (TWTR) is the best and fastest place to see what is happening and what people are talking about all around the world. Every day, instances of breaking news, entertainment, sports, politics, big events and everyday interests happen first on Twitter. Twitter is where the full story unfolds with all the live commentary and where live events come to life unlike anywhere else. The company's primary service can be accessed on a variety of mobile devices, at twitter.com and via SMS. In 2016, the company focused on positioning Twitter for long-term sustainable growth and making progress toward GAAP profitability. Specifically, the company clearly identified who Twitter is—the best and fastest place to see what’s happening in the world and what people are talking about. The company built and shipped product features that directly improved its key audience growth and engagement metrics. The company also simplified the organization to be what the company believe is more focused and efficient, and eliminated investment in non-core areas of its business, like Vine, which the company shut down in early 2017, and Fabric, which the company sold in early 2017. The company saw accelerating rates of growth on a year-over-year basis for daily active usage, or DAU, for three quarters in a row. The company's advertising business saw increasing competition for advertiser spending and the company believe that advertising revenue growth will continue to lag that of audience growth.1
In 2017, its focus is building and shipping product changes more rapidly to make Twitter safer. The company intend to invest in its core use case and in new product areas — such as live streaming video, among others — that further strengthen Twitter’s unique position as the best and fastest place to see and talk about what’s happening in the world. The company intend to continue integrating new, dynamic, and personalized content as the company recognized the importance of simplifying and creating a single destination for people to discover what’s happening on Twitter. The company also plan to simplify and differentiate its revenue products to drive sustainable long-term revenue growth by working to strengthen its unique value proposition, especially in live and video, that gives advertisers the ability to reach the most engaging audiences in the right context at the right time. The company intend to apply the same focused approach that drove renewed monthly and daily usage growth in 2016 to simplify its portfolio and its buying process for advertisers.
Products and Services for Users
Twitter. The company's primary service, Twitter, is a global platform for public self-expression and conversation in real time. Twitter allows people to consume, create, distribute and discover content and has democratized content creation and distribution. The reach of Twitter content is not limited to its logged-in users on the Twitter platform, but rather extends to a larger global audience.
The public nature of the Twitter platform allows it and others to extend the reach of Twitter content beyond its properties. Media outlets and its platform partners distribute Tweets beyond its properties to complement their content by making it more timely, relevant and comprehensive. These outlets and partners also add value to its user experience by contributing content to its platform. Many of the world’s most trusted media outlets, including the BBC, CNN and the Associated Press, regularly use Twitter as a platform for content distribution.
Periscope. Periscope is a mobile application that lets anyone broadcast and watch video live with others. Periscope broadcasts can also be viewed through Twitter and on desktop or mobile web browser. In 2016, the company continued to ship significant product updates, building more of Periscope’s technology into Twitter itself, and creating new, immersive video formats like live 360 video. The company also introduced the ability to create and Tweet live video from the Twitter app, powered by Periscope. Pairing Periscope with Twitter gives broadcasters greater distribution (anywhere a Tweet can be displayed, a Periscope can be too) and the ability to integrate into its revenue products. The company do not currently monetize videos on Periscope, other than to the extent they can be integrated into its revenue products.
Products and Services for Advertisers
The company's Promoted Products enable its advertisers to promote their brands, products and services, amplify their visibility and reach, and extend the conversation around their advertising campaigns. The company enable its advertisers to target an audience based on a variety of factors, including a user’s Interest Graph. The Interest Graph maps, among other things, interests based on users followed and actions taken on its platform, such as Tweets created and engagement with Tweets. The company believe a user’s Interest Graph produces a clear and real-time signal of a user’s interests, greatly enhancing the relevance of the ads the company can display for users and enhancing its targeting capabilities for advertisers. The company's Promoted Products are incorporated into its platform as native advertising and are designed to be as compelling and useful to its users as organic content on its platform.
Currently, its Promoted Products (all of which are labeled “promoted” within Twitter) consist of:
- Promoted Tweets. Promoted Tweets appear within a user’s timeline or search results just like an ordinary Tweet regardless of device. Using its proprietary algorithm and understanding of each user’s Interest Graph, the company can deliver Promoted Tweets that are intended to be relevant to a particular user. The company's goal is to enable advertisers to create and optimize successful marketing campaigns — and pay only for the user actions that are aligned with their marketing objectives. As a result, Twitter has added product features to Promoted Tweets based on advertiser objectives, which may include Tweet engagements (e.g., retweets, replies and likes), app installs or engagements, website clicks or conversions, or video views. The company plan to focus its investment in features that differentiate Twitter and capitalize on its unique value proposition for advertisers, including video and more organic ad formats.
- Promoted Accounts. Promoted Accounts appear in the same format and place as accounts suggested by its Who to Follow recommendation engine, or in some cases, in Tweets in a user’s timeline. Promoted Accounts provide a way for its advertisers to grow a community of users who are interested in their business, products or services.
- Promoted Trends. Promoted Trends appear at the top of the list of trending topics for an entire day in a particular country or on a global basis. When a user clicks on a Promoted Trend, search results for that trend are shown in a timeline and a Promoted Tweet created by its advertisers is displayed to the user at the top of those search results. The company feature one Promoted Trend per day per geography.
Advertisers can also run short video ads either before (also known as pre-roll ads) or during (also known as mid-roll ads) premium video content, such as its live NFL games, live election debate coverage or clips from a variety of interest categories. The company's technology dynamically inserts those advertisers' pre- and mid-roll ads into the relevant videos and delivers the ads to the audience targeted by those advertisers. The company may pay content partners a portion of its advertising revenue for the right to use and distribute their content on its platform.
The company's technology platform and information database enable it to provide targeting capabilities based on audience attributes like geography, interests, keyword, television conversation, content, event and devices that make it possible for advertisers to promote their brands, products and services, amplify their visibility and reach, and complement and extend the conversation around their advertising campaigns.
The company's platform also allows customers to advertise across the mobile ecosystem, both on Twitter’s owned and operated properties as well as off Twitter on third party publishers’ websites, applications and other offerings, across the full user lifecycle — from acquiring new users to engaging existing users. The company enable advertisers to extend their reach beyond Twitter through:
- MoPub, its mobile-focused advertising exchange, which combines ad serving, ad network mediation and a real-time bidding exchange into one comprehensive monetization platform.
- Twitter Audience Platform, an advertising offering that enables advertisers to extend their advertising campaigns with Twitter Promoted Products to audiences off Twitter while retaining access to Twitter’s measurement, targeting and creative tools.
Products for Developers
The company provide a set of tools, public APIs and embeddable widgets that developers can use to contribute their content to its platform, syndicate and distribute Twitter content across their properties and enhance their websites and applications with Twitter content. Websites integrating with Twitter add value to its user experience. Indeed many applications have been registered by developers to enable them to integrate with its platform, and leverage Twitter content to enhance and extend their applications in new and creative ways. The goal of its platform product development is to make it easy for developers to integrate seamlessly with Twitter.
Products for Data Partners
The company offer subscription access to its public data feed for partners who wish to access data beyond its public API, which offers a limited amount of its public data for free. The company's data products and services offer more sophisticated data sets and better data enrichments to allow developers and businesses to utilize its public content to derive business insights and build products using the unique content that is shared on Twitter. The company plan to take steps to grow its data licensing revenue with a more brand-centric approach to channels, markets, products, and pricing. The company believe this approach will position both Twitter and its key channel partners for greater growth and monetization, and Twitter is investing in deeper partnerships with a few select solution providers to help brands realize greater value from its data and platform.
Competition
The company's business is characterized by rapid technological change, frequent product innovation and continuously evolving user, advertiser, platform partner and developer preferences and expectations. The company face significant competition in every aspect of its business, including from companies that provide tools to facilitate communications and the sharing of information, companies that enable marketers to display advertising, and other online ad networks, exchanges and platforms. The company also compete to attract, engage, and retain people who use its products, to attract and retain marketers, and to attract and retain developers to build compelling mobile and web applications that integrate with its products. Twitter has seen escalating competition for digital ad spending and expect this trend to continue. The company also compete to attract and retain employees, especially software engineers, designers, and product managers.
The company compete with the following companies:
- Companies that offer products that enable everyone to create and share ideas and other content and information. These offerings include, for example, Facebook (including Instagram and WhatsApp) and Google (including YouTube) and Snap, as well as largely regional social media and messaging companies that have strong positions in particular countries. Increasingly, the company face competition for live premium video content rights from other digital distributors and traditional television providers, which may limit its ability to secure such content on economic and other terms that are acceptable to it in the future.
- Companies that develop applications, particularly mobile applications, that create, syndicate and distribute content across internet properties.
- Traditional, online, and mobile businesses that enable marketers to reach their audiences and/or develop tools and systems for managing and optimizing advertising campaigns.
As the company introduce new products, as its existing products evolve, or as other companies introduce new products and services, the company may become subject to additional competition.
The company's industry is evolving rapidly and is becoming increasingly competitive. See the sections titled “Risk Factors—If Twitter is unable to compete effectively for users and advertiser spend, its business and operating results could be harmed” and “Risk Factors—The company depend on highly skilled personnel to grow and operate its business, and if Twitter is unable to hire, retain and motivate its personnel, the company may not be able to grow effectively.”
