Twitter’s business model has long been criticized for not being a solid revenues generating machine. But the emergence of mobile advertising changed the landscape. Now researchers at eMarketer estimate that the micro-blogging site’s revenues could near $1 billion, and most of that would come from mobile ads.
eMarketer expects Twitter Inc. to earn $582.8 million from advertising revenues in 2013, approximately $950 million in 2014 when it is likely to go public, and $1.3 billion in 2015. According to the revised estimates of eMarketer, over 50 percent of its global revenues will come from mobile. That’s surprising, considering mobile generated almost negligible revenues for the company in 2011. eMarketer said mobile will continue to boost the company’s revenues in the near future. By 2015, that will account for over 60 percent of Twitter’s revenues.
In its previous estimate announced in September 2012, eMarketer said Twitter’s revenues will be slightly above $800 million in 2014. It hadn’t given any estimate for 2015. But the increased focus on mobile advertising compelled eMarketer to revise its estimate. Researchers said the company will also benefit from building native apps.
Mobile ads are expected to generated $308.9 million for the company in 2013, up from $138.4 million in 2012. Researchers said that United States will remain the most important market for Twitter, accounting for about 83 percent of its revenues in 2013. By 2015, the share of United States will come down to 76 percent.
Twitter has recently renovated its platform, mostly to attract advertisers by giving them a better medium to stay connected to with their potential customers. From being just a 140-character message sharing platform, Twitter now allows richer content like videos, photos, article summaries, etc. They have all added to the company’s efforts to attract advertisers.
The whole mobile and targeted advertising concept started from Facebook Inc. (NASDAQ:FB). The Menlo Park-based social networking site earned $306 million in mobile ad revenues in the fourth quarter of 2012. That’s approximately the same amount Twitter is expected to earn from mobile ads in the entire 2013. Facebook Inc. (NASDAQ:FB) continues to show significant improvement in the mobile space which now accounts for about 20.3 percent of its annual revenues.
Twitter continues to adopt Facebook Inc (NASDAQ:FB)’s model to increase its advertising revenues.