Brand of the Day: Twitter
Welcome to Brand of the Day, where we pick the company making headlines for the day and explain five elements you need to know about what has happened for them to be in the news.
Today we feature Twitter, which made headlines on Thursday after chief executive officer Dick Costolo announced that he has decided to step down after five years in the position.
Twitter was founded less than ten years ago by now interim CEO Jack Dorsey along with a few others, including Noah Glass, who came up with the name, and ‘Biz’ Stone, who helped design. Programming for what was then called ‘twttr’ began on 13 March 2006 and just eight days later, the first tweet – which said ‘inviting coworkers’ – was tweeted by Dorsey.
2) Going Public
In November 2013, the company went public. Shares opened at $45.10 on the company’s first day on the New York Stock Exchange, up 73 per cent from its $26 IPO price set the night before. Anthony Noto, the lead banker on the deal from Goldman Sachs, tweeted ‘Phew!’ just moments after the shares started trading. Yet Twitter still wasn’t profitable at the time of its IPO – while it brought in sales of $317m in 2012, it ended up reporting a loss of $79m, according to CNNMoney.
The social networking company has made a number of acquisitions since it was founded, with some of the most notable ones being video sharing service Vine and live video streaming app Periscope. Twitter acquired Periscope earlier this year to rival live-streaming app Meerkat, shortly after it unveiled its own video feature that allows users to record, edit, and tweet video clips. The moves mark Twitter’s push into video as it attempts to stay relevant with users while rivaling competitors including Facebook.
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4) Media Usage
In the media, Twitter has quickly become a go-to tool not only for journalists trying to get news out but also for people looking to consume news. It has also made it easier for organizations, companies, and others to break news – in 2013, the Boston Police tweeted the news that they found Boston Marathon bombing suspect Dzhokhar Tsarnaev. Because it makes for an easier dissemination of news, many countries under tight government control and censorship have blocked the social media site. Twitter is banned in China, North Korea, and Iran.
Twitter accounted for 0.87 per cent of the $145bn digital advertising worldwide market in 2014, up 0.49 per cent from 2013, according to eMarketer. Facebook increased its share of the global digital ad market from 5.8 per cent in 2013 to 7.9 per cent last year, with Google in the lead at 31.4 per cent in 2014.
The company largely relies on advertisers to make money, but has struggled recently as growth in user numbers has slowed. While the company has ramped up its ad offerings as of late, its last earnings report showed that revenue expectations fell short of analyst expectations, which former CEO Costelo said was due to ‘lower-than-expected contribution from some of our newer direct response products.”