Twitter’s Growth Strategy Might Be Paying Off

With the increase of new users, Twitter's stock price is up, and the company is looking to capitalize on a hidden market.



The stability of Twitter and its growth rate have been constantly under question since its IPO last year. The company has since made many changes to its platform, both in terms of infrastructure, user interface and business direction. It seems that Twitter is focused on growth rather than profit. However, with stock prices up and the increase of new users, the company’s growth strategy looks like it’s paying off.

Twitter’s second quarter data caused a stir on Wall Street, as the the numbers beat the expectations of analysts. Monthly active users increased from 255 million in March to 271 million as of the end of June. While this is only a six percent increase, it’s more growth that Twitter has experienced in a long time. Revenue has also doubled, and the company is projecting up to $1.33 billion in revenue for the year — 10 percent higher than previous estimates.

Dick Costolo, Twitter’s CEO, believes that events like the World Cup prove that Twitter can generate greater value and interaction. Costolo said that the World Cup interaction on Twitter “has given me confidence that we can create great user experiences by organizing content around topics and live events.”

Fans of the World Cup did generate 672 million tweets, but Costolo also said product changes helped the service grow. But there isn’t a World Cup every quarter to bring in new users. A relatively untracked segment of users may be available to Twitter — unregistered users.

According to CNET writer Ian Sherr, Twitter staff is aware of “users who look at content from Twitter, whether on TV or embedded into a website, but aren’t signed up or logged in to the service.” Sherr also noted: “Costolo said his team estimates that audience is two-to-three times the size of its reported active users, and the company plans to begin creating specialized ‘products’ for them, such as ads or curated content.”

If Twitter is able to provide its existing users with targeted and relevant advertising, while also attracting new users at a decent rate, then it may just achieve mainstream legitimacy. And if the company is able to tap into an unregistered user base and provide that group with quality content, then the network is bound to grow both in user numbers and profit.