WHEN: Today, Thursday, February 11th
WHERE: CNBC's "Squawk on the Street"
Following is the unofficial transcript of a CNBC interview with Twitter COO Adam Bain and CNBC's Julia Boorstin on "Squawk on the Street" (M-F, 9AM-11AM ET) today, February 11th. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000493302&play=1.
All references must be sourced to CNBC.
QUINTANILLA: TWITTER SHARES DOWN TODAY AS USER GROWTH DISAPPOINTS THE STREET. THE STOCK NOW DOWN ABOUT 40% SO FAR THIS YEAR. JULIA BOORSTIN IS LIVE IN SAN FRANSCISCO WITH TWITTER'S COO ADAM BAIN.
BOORSTIN: ADAM THANKS SO MUCH FOR JOINING US HERE THIS MORNING. SO LAST QUARTER, YOUR USER NUMBERS DECLINED DESPITE TWITTER MAKING A NUMBER OF CHANGES DESIGNED TO ADD MORE USERS AND RETAIN USERS. WHY CANT TWITTER MANAGE TO ADD USERS?
BAIN: JULIA THANKS FOR HAVING ME HERE. AND LOOK TWITTER IS AN IMPORTANT COMPANY. ITS VITAL TO THE WORLD AND WE'RE FOCUSED WITH A NEW LEVEL OF EXECUTION THAT WE HAVENT HAD BEFORE. OUR FOCUS ACTUALLY IS AROUND LIVE. LIVE IS IMPORTANT AND POWERFUL TO PEOPLE AND ALSO TO THE BUSINESS. ON THE PRODUCT SIDE, WERE FOCUSED ON REFINING AN ICONIC PRODUCT AND WITH THIS FOCUS ON LIVE, WE KNOW THAT WE WILL SEE A RETURN TO USER GROWTH AND ALSO THE BUSINESS IS IN A REALLY STRONG PLACE.
BOORSTIN: BUT IS THIS A BUSINESS THAT IS BASICALLY LIMITED TO AROUND 300 MILLION USERS? WHAT SHOULD MAKE US THINK THAT YOU ACTUALLY CAN GROW THOSE USERS WHEN YOUR NUMBERS HAVE BEEN BASICALLY STAGNANT FOR ABOUT A YEAR?
BAIN: SO FOR MARKETERS WHICH THE BUSINESS IS BASED ON ADVERTISING IN A LARGE PART, FOR MARKETERS THAT REACH IN SCALE IS OVER NOW 800 MILLION PEOPLE. OVER 300 MILLION LOG INTO TWITTER ON A 30 DAY BASIS AND A WHOLE LOT MORE OVER 500 MILLION THAT COME TO TWITTER IN A LOGGED OUT STATE. SO WE JUST STARTED TURNING ON ADS AND ADVERTISING IN THIS LOGGED OUT STATE. SO FOR MARKETERS WE HAVE MORE THAN 2.5 TIMES OUR REACH IN SCALE JUST IN THE LAST QUARTER.
CRAMER: ITS JIM. ADAM GOOD TO SEE YOU. SOMEWHAT CONCERNED HERE. THERE'S A MOMENT IN THE CALL WITH MR. DORSEY WHO ALSO OF COURSE WORKS AT SQUARE RUN SQUARE HE SAYS RECRUITING IS HIS NUMBER ONE PRIORITY. AND I WANTED TO KNOW IF HE IS OUT THERE RECRUITING HOW DO WE KNOW WHETHER HE SHOULD BE TAKING THE BEST PEOPLE AND PUTTING THEM IN SQUARE RATHER THAN TWITTER? I THOUGHT THAT THRUST SHOWED A REAL CONFLICT OF INTEREST AND IT SURPRISED ME. IT REALLY DID.
BAIN: WELL JIM THANKS FOR THE QUESTION. JACK TALKED ABOUT IN THE EARNINGS CALL YESTERDAY ABOUT HIS ABILITY TO BALANCE HIS RESPONSIBILITIES ACROSS BOTH COMPANIES AND SPEAKING PERSONALLY, IVE SEEN IT AND HES DOING A TERRIFIC JOB AND THE ENTIRE MANAGEMENT TEAM IS STEPPING UP. WEVE ALSO HAD AN ADDITION TO THE MANAGEMENT TEAM. WEVE JUST ANNOUNCED OUR CMO LESLIE BERLAND, WHO IS AN INCREDIBLE EXECUTIVE AT AMERICAN EXPRESS AND ACTUALLY ONE OF OUR PAST CUSTOMERS AND CLIENTS FOR TWITTER.
CRAMER: ADAM, YOU TALKED ABOUT PERISCOPE LOVINGLY ON THE CALL. I HAVE DATA HERE FOR PERISCOPE I HAVE BEEN DOING IT FOR FOUR MONTHS AND ITS SOMEWHAT ENCOURAGING, BUT YOU KNOW WHAT I THINK THE EQUIVALENT OF FACEBOOK PERISCOPE FOR TWO DAYS ADAM AND IVE ALREADY DONE FAR MORE USERS THAN TWITTER. I JUST STARTED. AND ITS DRAMATICALLY MUCH BIGGER. ITS ALSO -- IT DOESNT GO AWAY. ITS THERE THE NEXT DAY. HOW CAN YOU COMPETE AGAINST FACEBOOK IF A GUY LIKE ME IS ON THERE FOR FOUR MONTHS DOESN'T GET NEARLY THE TRACTION I GET ON FACEBOOK IN TWO DAYS?
BAIN: WERE REALLY EXCITED ABOUT PERISCOPE. IT WAS APPLES APP OF THE YEAR FOR 2015. AND WE KNOW IT WILL JUST GET BIGGER AND STRONGER. WE HAVE JUST DONE INTEGRATION FROM TWITTER INTO PERISCOPE SO YOU CAN ACTUALLY GO LIVE FROM PERISCOPE AND HAVE THOSE LIVE BROADCASTS SHOW UP RIGHT WITHIN SIDE OF TWEETS. AND WERE ALSO SEEING ON THE BUSINESS SIDE A PRETTY HUGE AND POWERFUL CANVAS THAT MARKETERS ARE TAKING ADVANTAGE OF AND WE SAW IT ACTUALLY DURING THE SUPER BOWL. DORITOS THE ADVERTISING BRAND WENT LIVE FROM LEVIS STADIUM DURING THE SUPER BOWL AND IT WAS AN INCREDIBLE EXPERIENCE FOR CONSUMERS. THEY ACTUALLY PROMOTED THAT ALSO ON TWITTER. SO WERE REALLY EXCITED ABOUT IT. ITS A GREAT CANVAS AND A GREAT OPPORTUNITY FOR MARKETERS TO TAKE ADVANTAGE OF.
QUINTANLLA: ITS CARL. YOUVE GOTTEN MORE THAN YOUR SHARE OF ADVICE FROM OUTSIDERS ON HOW TO ADJUST THE BUSINESS MODEL IN RECENT MONTHS. BUT INCREASINGLY THERE IS THIS CALL FOR TWITTER TO DITCH THE AD REVENUE MODEL AND OPEN THE API AND SELL REAL TIME DATA FROM THE CUSTOMERS THAT YOU ALREADY HAVE WHICH WOULD BE POWERFUL. IS THAT DISMISSED OUT OF HAND BY THE BOARD? HAS IT BEEN CONSIDERED AT ALL?
BAIN: HEY, CARL. GREAT TO SEE YOU, AS WELL. LOOK, ON THE BUSINESS SIDE, THE BUSINESS HAS BEEN INCREDIBLY STRONG. WE ANNOUNCED OUR 2015 REVENUE WAS CLOSE TO 60% YEAR ON YEAR GROWTH OUR Q4 WAS ALSO STRONG OVER 50% YEAR ON YEAR GROWTH ON A CONSTANT CURRENCY BASIS. AND IN TERMS OF THE BUSINESS MODEL WERE ACTUALLY PRETTY WELL DIVERSIFIED. WE HAVE OUR REVENUE ON THE OWNED AND OPERATED SIDE, THIS IS THE TWITTER LOGGED IN BASE, BUT WEVE ALSO NOW RECENTLY OPENED UP ADS TO LOGGED OUT USERS. WE ALSO HAVE ADS IN SYNDICATION. SO ADS THAT TRAVEL WHERE TWITTER USERS GO OUTSIDE OF THE TWITTER APP. AND ALSO WHERE CONTENT GOES, AS WELL. WE DO HAVE A DATA AND A LICENSING BUSINESS AS WELL AS A PRETTY LARGE AD EXCHANGE CALLED MOPUB.
QUINTANILLA: BUT THERE IS NO INKLING THAT YOU WOULD CONSIDER COMMITTING TO THAT DATA BUSINESS AND ESSENTIALLY THROWING IN THE TOWEL ON TRYING TO GROW THE USER BASE AS JULIA GOT TO EARLER?
BAIN: WERE VERY COMMITTED TO THE DATA BUSINESS THIS IS A FANTASTIC PART OF OUR BUSINESS MODEL. IT POWERS FOR EXAMPLE ALL THE CUSTOMER SERVICE EXAMPLES THAT YOU HAVE BEEN SEEING ACROSS THE WORLD, YOU KNOW YOURE STUCK IN AN AIRPORT BECAUSE YOUR PLANE GOT DELAYED, OFTEN IT'S THE CASE THAT YOU GET BETTER SERVICE BY TWEETING TO THE AIRLINE THAN PICKING UP THE PHONE. AND THE BUSINESSES THEMSELVES ARE DOING CUSTOMER SERVICE ON THE PLATFORM BECAUSE THEY HAVE A CHANCE TO DO IT OUT IN THE OPEN AND ACTUALLY TURN THE CUSTOMER MOMENT INTO A MARKETING MOMENT. SO ITS A FANTASTIC BUSINESS FOR US AND IT ACTUALLY POWERS ALL OTHER KINDS OF CONSUMER EXPERIENCES SO WE ARE VERY MUCH COMMITED TO IT.
BOORSTIN: YOU MENTIONED YOUR REVENUE GROWTH IN Q4, BUT YOUR GUIDANCE FOR Q1 WAS LESS THAN WALL STREET HAD EXPECTED. ARE YOU CONCERNED THAT YOUR AD LOAD IS SUPPRESSING YOUR USER GROWTH?
BAIN: NO. SO LET ME TALK A LITTLE BIT ABOUT WHAT WE SAW. AS YOU MENTIONED WE HAD A STRONG Q4 AS WE THINK ABOUT Q1, TRADITIONALLY FOR BRAND ADVERTISERS SO THESE ARE LIKE THE VIDEO ADVERTISERS FOR EXAMPLE, HISTORICALLY Q1 IS A LOWER QUARTER THAN Q4 BECAUSE THE HOLIDAY SEASON IS A HIGH SPENDING QUARTER. SO WHAT WE SEE IN TERMS OF THAT BUSINESS, ITS THE LARGEST PART OF OUR BUSINESS. SO WE SEE SOME SEASONAL TRENDS THERE. THE DIRECT RESPONSE BUSINESS, THESE ARE ADVERTISERS LOOKING FOR CLICKS AND CONVERSIONS, THAT IS THE FASTEST GROWING PART OF OUR BUSINESS, BUT ALSO A SMALLER PART. AND WERE CONFIDENT THAT WELL CONTINUE TO GROW THAT, AS WELL.
BOORSTIN: AND I JUST WANT TO RETURN TO SOME COMMENTS YOUVE MADE OVER THE COURSE OF THIS INTERVIEW ABOUT YOUR PRODUCT. YOU SAID THAT YOU WANTED TO REFINE THE PRODUCT. OBVIOUSLY YOU HAVE TO WORRY ABOUT NOT LOSING YOUR CORE YEAR BASE, BUT THERE ARE A LOT OFC ONCERNS THAT THE CHANGE YOU ARE MAKING ARE JUST NOT ENOUGH TO ATTRACT A NEW DIFFERENT KIND OF USER. WHY AREN'T YOU MAKING CHANGES FASTER?
BAIN: WERE FOCUSED ON LIVE BECAUSE WE THINK LIVE IS ACTUALLY A REALLY POWERFUL PART OF THE PLATFORM. WHETHER LIVE VIDEO OR LIVE INFORMATION, WE THINK WE HAVE A MASSIVE OPPORTUNITY WHEN IT COMES TO LIVE. AND WE HAVE MADE A LOT OF CHANGES IN FACT WE MADE A CHANGE LAST NIGHT WHERE WEVE TURNED ON A WAY TO BRING THE BEST OF TWITTER TO YOUR TIME LINE.
BOORSTIN: TWITTER EVALUATION IS NOW AROUND $10 BILLION. A NUMBER OF PEOPLE IN THE INDUSTRY HAVE SAID THIS IS THE PRICE POINT WHERE TWITTER WOULD BE A REALLY ATTRACTIVE ACQUISITION TARGET. DOES TWITTER NEED TO REMAIN A STANDALONE COMPANY?
BAIN: SPEAKING FOR THE MANAGEMENT TEAM, WERE FOCUSED ON BUILDING A REALLY STRONG AND POWERFUL TWITTER. WE BELIEVE THAT THE ROAD MAP THAT WE HAVE FROM A PRODUCT STANDPOINT IS STRONG. AND WE BELIEVE THAT TWITTER CAN BE A POWERFUL INDEPENDENT COMPANY.
BOORSTIN: UNFORTUNATELY, WERE OUT OF TIME HERE, BUT ADAM, THANK YOU SO MUCH FOR JOINING US. ADAM BAIN, TWITTERS COO.
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