Can Twitter turn its huge overseas user base into #$$$?

Who is Twitter's overseas competition?

For Twitter, whose shares surged 73 percent on its trading debut Thursday, the company's greatest opportunity could also be its greatest challenge.

While the micro-blog has made significant headway in growing its international user base, it faces the grand challenge of monetizing it.

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International users account for 179 million, or 77 percent, of the website's 232 million monthly active users. However, just 25 percent of the company's revenues came from its overseas operations in the six months ended June 30, 2013.

"Twitter's international user base is a big opportunity; it's just something no one has quite figured out how to monetize just yet," Charles Sizemore founder of investment advisory firm Sizemore Capital Management told CNBC.

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"It's challenging for a couple of reasons – in general advertising infrastructure isn't as sophisticated outside of the U.S., and advertising revenues per user are significantly lower," he added.

In addition, Twitter faces competition from local websites, mobile applications and services that provide real-time communications, like Japan's Line and South Korea's Kakao.

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The company, which derives 87 percent of its revenue from third parties advertising on its website, generates around 7 times more in advertising revenue per U.S. user than it does internationally.

Twitter's ability to garner more advertising dollars overseas will hinge on its capability to show local international brands a strong return on investment through Twitter advertisements, said William Preston, research analyst at Renaissance Capital.

The company has been focusing its international spending on sales support and marketing activities in specific international locations including Australia, Brazil, Canada, the United Kingdom and Japan, according to its October 3 S-1 filing.

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Preston says he's optimistic that the newly-listed company will succeed in growing its revenue abroad.

"Facebook's revenue per user abroad is well above Twitter's. If Twitter can monetize to the same extent as Facebook, then it has a lot of growth ahead of it," he said. In the third quarter, Facebook's international advertising revenue stood at $966 million, rising from $548 in the same period a year earlier.

"We expect international growth to continue to outpace U.S. growth and be a key driver for Twitter's overall revenue growth," he added. User growth rates in Argentina, France, Japan, Russia, Saudi Arabia and South Africa are expected to continue to be higher than that of the United States in the coming years.

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Sizemore agreed, noting, "Twitter is a couple of years behind Facebook in terms of monetizing their user base. They are going to have to invest, put their boots to the ground, and drum up business. It's a long-term project, it may not happen within the next six months, but it will happen," he said.

Scott Kessler, head of technology research at S&P Capital IQ, however, notes that expanding overseas operations will require a lot of the company's resources, which could prove challenging. While the company's revenue has been growing, it is not yet profitable, posting a loss of $64.6 million in the September quarter.

"As the company starts building out offices and capacities around the world – that takes resources, time and a lot of skill – it could be a big challenge for the company over the next year or two," Kessler told CNBC earlier this week.

—By CNBC's Ansuya Harjani; Follow her on Twitter: @Ansuya_H