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Twitter selling ads in Russia to fuel global growth

Twitter is selling ads in Russia as it looks to secure a larger slice of a market where regulatory hurdles and an economy in crisis are forcing rivals such as Google and Apple to revaluate their strategies.

The micro-blogging site is selling inventory through ad network Httpool with Russia’s biggest lender OAO Sberbank and wireless operator VimpelCom reportedly among its first advertisers.

Twitter hopes the tie-up open up new revenue streams from the world’s sixth largest country by internet audience as it looks to address slowing user numbers. While revenue more than doubled in its third quarter to $361m, Twitter’s user growth – the percentage change in the number of users who log in once a month – slowed again after regaining momentum earlier in the year.

Colin Crowell, vice president of global public policy at Twitter, said in an interview in Moscow that its “prospects” as a company are contingent on succeeding in markets around the world.

“We’ve been – particularly over the last 18 months – growing internationally to catch-up where the service and the brand outleaped the size of the company a few years back,” he added.

The social media platform had 10.1 million Russian users as of July compared to Facebook’s 10.5 million.

Twitter’s charge into Russia signals its intent to overcome the regulatory hurdles that have caused other technology firms to either exit the market or change their strategies.

Crowell said the business is working with regulator Roskomnadzor to identify ways it can comply with a rule that forces bloggers with more than 3,000 daily visitors to register as mass media and abide by a similar set of guidelines as Russian newspapers and TV stations.

Another obstacle Twitter will need to overcome is the country’s controversial online censorship law that requires data on Russian citizens to be stored locally. Twitter said it was too early to comment on the rule, which will not come into full effect next year. However, some Russian observers and critics have warned that the law could drive online firms from the country.

Google has pulled engineers out of Russia in recent weeks but pledged its “commitment” to its users in the country.

Twitter's push into Russia comes as the country is engulfed by an economic crisis following a dramatic fall in the rouble. Apple responded to the downturn by halting online sales in Russia after the dip in currency made iPhone prices much cheaper. It has also raised prices on its app store in response to the fluctuating exchange rates.

Russia has been difficult for foreign online companies to break into due to the dominance of a small number of sites such as LiveJournal and VKontakte. The country’s middle class has enjoyed phenomenal growth in recent years, presenting opportunities for brands such as Apple and Asos to enter the market.