Zipdial could be the key to Twitter’s future success

India and its burgeoning mobile market may be Twitter's answer to reviving user growth on the social media service.

"There are more smartphones in India than they are in America today," Valerie Wagoner, who recently sold her Indian mobile start-up Zipdial to Twitter, told CNBC's Worldwide Exchange on Thursday.

Twitter purchased ZipDial for a reported $40 million earlier this year. The company allows users to dial a toll-free number and receive tweets from the person they want to follow via SMS text message. Sending a missed call is a popular and low-cost way to communicate in India and other emerging markets like Indonesia.

Only 1 in 4 people have a phone in India, according to Wagoner, and most Indians do not have a data plan, making it challenging for social media companies and advertisers to push their content and products to consumers through modern channels. This is why Wagoner said her 'missed call' technology is key.

The Twitter banner hangs at the NYSE.
Adam Jeffery | CNBC
The Twitter banner hangs at the NYSE.

"You can simply just dial a number from any phone regardless of whether or not you have a smartphone, and start following tweets from the prime minister, or the cricket national champion…so it's really about how do you create access for 100% of mobile devices, whether or not you have a smartphone today…and then gradually upgrading people into the richer and richer experiences that Twitter can offer," Wagoner said.

If Twitter can successfully integrate ZipDial's technology, analysts say, it may give the social media giant a way to reach those users who do not have a data package on their phone. Twitter is setting up a research and design centre in Bangalore using some of Zipdial's staff and local knowledge, according to the Financial Times.

Understanding how India's one billion people communicate and consume content is crucial.

"Emerging markets users need a different user experience, and by designing for them we can drive phenomenal growth for them [Twitter]. That's what my company Zipdial has been doing…by integrating our product platform into Twitter's platform we can really drive phenomenal results especially staring here in Indian and beyond.," Wagoner said.


Slowdown in Twitter's user growth has been a big concern for Wall Street and will be the number investors focus on when it reports fourth quarter earnings Thursday afternoon. Twitter has continued to expand internationally and in its third-quarter results, said it had expanded its advertising platform – Twitter Ads – into 12 new countries. But the key for analysts is whether this can be monetized.

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"We think they have done a pretty good job when it comes to global expansion. The real question is to what extent re they going to be able to push their brand message as well as increasing monetization, that really is the big challenge overseas," Scott Kessler, senior equity analyst at S&P Capital IQ, told CNBC in a TV interview.

But skeptics question whether users will actually go through the process of sending a missed call to follow the country's Prime Minister Narendra Modi and beloved Bollywood film star Sharukh Khan.

Some analysts also questioned whether ZipDial has a sustainable business model given the rapid rise in smartphone use. Brian Blau, research director at Gartner, told CNBC in a phone interview, that as broadband increases and data prices come down in India, there may be less demand for ZipDial's technology.

- Additional reporting by Arjun Kharpal