Twitter is at a turning point, trying to roll out advertising while also maintaining the user experience. I sat down with Twitter CEO Dick Costolo at the company’s new San Francisco headquarters to talk about his plans to grow the social media giant.
No IPO for Now, No Sale—Ever
Costolo said he’s focused on growing users, his employee base, and rolling out ads. He insisted he is not thinking about an initial public offering, and is under no pressure to do so, from investors or regulators. And Costolo insists that Facebook’sIPO debacle has had no impact on his perspective. (Read More: Facebook vs. Twitter, Who Has Edge in Mobile Ad Wars?)
“Nothing external to the company has had any bearing on how I think about when to take Twitter public or not to,” Costolo said. So if Twitter isn’t going public, is he interested in selling? Costolo said no: “We have every hope and belief that we will be a successful — independent — company.” (Read More: Twitter Redesign Gets Personal, ‘Like’ Facebook.)
Ad Strategy: Practical, but Cautious
Twitter only has two types of ads — promoted Tweets and promoted Trends — I asked Costolo if they’re enough to significantly grow the business. He said that once the company rolls out more self-serve tools to advertisers, this “is the scalable model that will do everything we need to do for the business.” (Read More: New Twitter Tools, Game Changer for Businesses?)
Costolo said he does not see an inherent conflict between serving users and advertisers, because advertisers are only charged if users want to interact with ads. “Our business is only going to work if we’re putting content in front of our users that they want to see and that they engage with. And that’s the simple equation,” Costolo says. “If we do that, the users will be happy, our business will work, and our advertisers win.”
He wouldn’t reveal how fast Twitter’s revenue is growing, but said he wants to “preserve the user experience.” Twitter is closely monitoring the service to make sure that users who see ads are using Twitter as much or more than they were before those users started seeing ads.
Beyond Ads: Twitter Commerce?
Twitter may very well be leaving money on the table, as it allows independent developers to sell tools for the likes of data analytics and customer service. Costolo said he just doesn’t care. “We want to do all the things we can do to bring people closer together ... and anything that’s outside of that, we’re happy to let other people do and profit from.”
Why is Twitter passing up all these revenue-making opportunities? Costolo said: “Because you have to focus .... When you think to yourself, ‘If I let someone else do this, I might leave 50 cents on the table,’ then you don’t have as compelling a platform or as compelling an ecosystem.”
Where could Twitter potentially grow? E-commerce. “It’s particularly interesting in areas where you’ve got things like perishable inventory like tickets,” Costolo says. “We observe that and are paying attention to that and are thinking about the kinds of ways we could participate in that value exchange.”
Costolo also weighed in on Twitter’s legal battle, protesting the government’s demand that Twitter hand over information about a user. “We have a core value here at Twitter that says we want to defend and respect the user’s voice. And that’s important to us on a global basis,” Costolo said. “Someone doesn’t sign up for a service expecting that their sign up information is going to be handed over without them being asked .... We’re going to defend our users rights.” (Read More: Twitter's Legal Battle: Who Owns Your Tweets?)
—By CNBC's Julia Boorstin; Follow Her on Twitter @JBoorstin
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