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Twitter Ad Revenue May Soar to $1 Billion Next Year

Damien Meyer | AFP | Getty Images

Twitter will generate nearly $1 billion in ad revenue next year due to a surge in mobile advertising on its Web microblogging service, according to a report released on Wednesday.

Mobile ads will account for roughly half of Twitter's advertising revenue this year and will make up more than 60 percent of the company's ad revenue by 2015 according to research firm eMarketer.

The increasing popularity of Twitter's mobile ads - introduced in March 2012—caused eMarketer to raise its 2014 ad revenue estimates for Twitter to $950 million, versus its previous estimate of roughly $800 million. Twitters' ad revenue this year will total $582.8 million, according to the report, roughly double what it was in 2012.

Twitter, which allows people to share 140-character messages on its online service, is privately held and does not disclose financial results.

With more than 200 million monthly active users, Twitter is among the Web's most popular social networking services, along with Facebook, and is expected by analysts to float shares to the public within two years.

As consumers increasingly access the Web on smartphones, mobile ads have become increasingly important to the businesses of Web companies such as Facebook and Google. Facebook said in January that its mobile ad revenue doubled from the third quarter to the fourth quarter, representing roughly 23 percent of its $1.33 billion in fourth-quarter ad revenue.

"Twitter has ultimately benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices," eMarketer said on Wednesday.

eMarketer said its revenue forecasts are based on analysis of reports that track media buying trends, Twitter usage data and interviews with executives at advertising agencies, online publishers and others.

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