Twitter ad revenue to hit $540M by 2014

Twitter’s ad-revenue is set to hit US$540-million by 2014 — triple its current value. That’s according to research from marketing analysis firm eMarketer.

The news comes fresh on the back of Twitter CEO Dick Costolo claiming that the social network is “not a media company”. Costolo made the comments while addressing AllThingsD‘s media conference.

The comments were surprising given Twitter’s reputation as a platform for breaking news, entertainment and a variety of communications.

“You [even] sell advertising,” AllThingsD’s Peter Kafka pointed out to Costolo.

Costolo elaborated saying that while his company is “in the media business”, it is “not necessarily a media company”.

“We don’t create our own content, we’re a distributor of content and traffic. We’re one of the largest drivers of traffic to other media properties, [namely] to other online web properties, even to films,” he said.

This ability to drive traffic has been an important factor in the company’s ability to sell advertising.

Despite Twitter’s global appeal, the majority of its advertising revenue still comes from within the US. According to eMarketer, some 90% of Twitter’s revenue comes from US sources, “with other countries contributing just US$26-million to its ad revenues this year”.

Although it will have diversified its income sources slightly in the next couple of years, eMarketer estimates that US sources will still account for 83% of Twitter’s income by 2014.

By way of comparison, while LinkedIn has lower revenues and a lower growth rate, its bets are less hedged on a single market.

The professional network is set receive around US$226-million in ad revenues this year — slightly less than Twitter’s US$260-million. Around 32% of that income, however, will come from abroad and eMarketer reckons that figure will grow to around 40% of the S$405-million it estimates LinkedIn will be making by 2014.

Whether or not Twitter is looking to expand its non-US advertising market, it is certainly doing its level best to stay on the right side of governments around the world. The recent announcement that it would be censoring tweets on a country-by-country basis is evidence of this.

At the AllThingsD event, Costolo reportedly dodged questions about whether 2012 would be Twitter’s first profitable year. “We don’t discuss financials,” he said.

He added that the company would be focussing on getting scaling its current line of revenue streams and “launching these products globally” rather than finding new ones.



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