Twitter CEO Dick Costolo
Our top questions for Twitter management on their IPO roadshow.
The TWTR Top 11:
1. How are you going to use the IPO proceeds? Can you outline how we should expect the proceeds to accelerate your growth?
2. More than 77% of Twitter users are from outside the United States, but only 26% of your consolidated revenue comes from outside the United States. Why is the yield on international users so much lower, and how will this trend over time? Are there structural impediments to revenue internationally?
3. Timeline views per monthly average user (MAU) declined sequentially by 1% in Q3 2013? Is this an indication of engagement declining, or is there another dynamic at work?
4. How should we think about the market size for the total number of global users? Especially, vis-à-vis Facebook’s (FB) 1.15 billion monthly users as of Q2 2013?
5. Generally speaking, why have some advertisers been early adopters and others taken longer to begin advertising on your platform? How do you show ROI to advertisers?
6. How will the financial model look longer term? As an example, Facebook currently has costs of sales that are 26% of Q2 2013 revenue and Twitter is at 36%. Longer term, is there any reason that Twitter can’t have operating margins comparable to Facebook’s?
7. Acquisitions have been an important part of your strategy historically, are there any areas in particular that you are focused, like analytics as an example?
8. How do you view the competitive landscape? In particular, Google (GOOG), LinkedIn (LNKD), and Facebook appear to have low barriers to entry given their high user bases and, as we all know, before Facebook there was MySpace.
9. According to a recent Gallup poll of people that have joined Twitter 36% said they don’t use the service and 7% have admitted to shutting down their account. Meanwhile, only 7% of Facebook users don’t use their account and only 5% admitted to shutting down their account. What do you make of this poll and the implication on user engagement? Along that line, how much time per week, or month, does the average user spend per month on the site?
10. What are the most important metrics for the health of your business?
11. What keeps you up at night?
Daryl Jones is Director of Research at Hedgeye. You can follow him on Twitter @HedgeyeDJ