Twitter Grows Up and Grows Revenue: Interview with CEO Dick Costolo


Twitter is coming of age.

After giving hundreds of thousands of businesses a free way to connect with customers, the self-serve ad platform it announced today will allow it to make money off companies already valuable Twitter presence.

Twitter’s revenue is sure to scale quickly once it opens its service to 10,000 American Expresssmall businesses next month and then to anyone with a credit card later this year. But CEO Dick Costolo tells me small businesses are just one new source of Twitter’s revenue.


Costolo calls 2012 “The Twitter Election.” For the first time Twitter is taking political ads. And a contentious and drawn-out Republican primary is working to Twitter’s benefit. Costolo says every major candidate is both Tweeting and buying ads. That’s not all—Twitter functions as a real-time feedback loop, a digital focus group of sorts, which candidates on both sides of the aisle are embracing as a direct line of communication to voters.


Much of Twitter’s new revenue this year will come from overseas.

The company already has offices in London and Tokyo, and this year it’ll open a number of other international offices to focus on signing advertisers to match messages with fast-growing International tweets.

Twitter’s available in 20 languages, but this year we can also expect the company to translate into more languages.


Commerce is already happening on Twitter—companies offer deals, take food orders, and restaurant reservations on the platform. Costolo sees an opportunity to build on this—the company is already experimenting with ways to help companies do business on Twitter. Could we see a next generation of online shopping without having to leave the Twitter platform? Perhaps. And presumably Twitter will figure out how to enhance the business and take a cut.


One area where Twitter says it does not plan to make money, is analytics. A number of independent companies charge to analyze Twitter’s data. They tell brands how fans are talking about them or using Twitter data as a focus group on everything from popular colors to who’s posed to win a political race. Costolo says he’d rather give that information away for free. The idea is that by helping companies use Twitter more effectively, they’ll use it more, and advertise more effectively, which will drive revenue.


Now that Twitter’s serious about growing revenue, is it thinking about going public? No, says Costolo. In fact, he’s actively managing the company’s shareholders to stay under the key 500 number which triggers financial disclosure requirements. He insists he’s not thinking about the window in which Twitter should go public—just focusing on growing the company.

Questions? Comments?