Moments ago, at a Wired business conference in New York, Twitter CEO Dick Costolo sent a clear message to attendees: Twitter has an effective business model, dammit.
Twitter, which Costolo characterized as at the forefront of the second screen movement, has its share of worries. Specifically, Costolo said he sometimes worries about “the pace of execution and cadence and are we too design heavy or engineering heavy and how do we remove bureaucracy” from the company’s ever-ballooning engineering ranks. He also said that Twitter is living in a “superhealthy ecosystem” and that “we’ll make plenty of money.”
Indeed, time and again during Costolo’s sit-down, talk turned — unsurprisingly — to how Twitter monetizes its more than 100 million users. He addressed the dreaded question by explaining that Twitter has always known that the “unit of monetization had to be the tweet” that the “tweets would be the ads themselves.” He added that the company also quickly decided that ads had to be “initially organic content” on the platform or a brand would risk alienating its followers as as a result. With those observations in mind, “We gave [them] to the design and engineering team and said, ‘Go and implement.’”
Despite concerns that what they’ve come up with hasn’t exactly taken off like a rocket, Costollo seemed to suggest that Twitter isn’t dramatically altering course. In fact, asked by Wired senior editor Steven Levy if there isn’t “something to add” to its arsenal of money-making products, Costolo said his “short answer” is that “we’re confident that we’ve got a hit on our hands” and that “this business will be a really big business.” Costolo added that he is “never going to optimize for short-term revenue at the expense of users’ experience of the company’s longevity.”
Invariably, questions about a Twitter IPO were also raised by Levy. Again, Costolo was breezy in his responses. “The business is working so well” and raised so much in financing last year, he said that “we don’t see any need or urgency to even start thinking about that stuff. We have plenty of money in the bank from the financings we [closed] last year. So [thinking about the IPO in terms of] months of years isn’t something I think about.”
As for whether the company might miss its opportunity, given that the IPO window is seemingly wide open, if not already salivating at the prospect of a Twitter IPO, Costolo called trying to time an offering “silly and short-sighted thinking.” Google, he observed, “went public when it wanted to, and on its own terms. If you have a great business and it’s satisfying to you and growing along with your projections, you aren’t beholden to a window of opportunity when market is hot.”
For those investors whose fascination with Twitter might cool in the meantime? “They can stay on the sidelines…” he said.
Photo: Courtesy of Twitter