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How Twitter Plans to Cash in on Half a Billion Users

December 10, 2015, 6:57 PM UTC
Squawk on the Street
SQUAWK ON THE STREET -- Pictured: Jack Dorsey, co-founder of Twitter, and just-named interim CEO of Twitter, in an interview at CNBC's San Francicso bureau, on June 12, 2015 -- (Photo by: John Chiala/CNBC/NBCU Photo Bank via Getty Images)
Photograph by John Chiala — CNBC/NBCU/Getty Images

Twitter said it was testing a feature to show advertising to people who checked Twitter without logging in, to cash in on an additional half a billion people each month.

The microblogging site’s advertisers are currently able to target only the 320 million monthly active users (MAUs) who are logged in.

Twitter‘s biggest rival, Facebook with its 1.55-billion user network, has been consistently launching tools to capture ad dollars.

Twitter‘s move is aimed at targeting promoted tweets and videos at the 500 million people who read tweets without having a Twitter account, or who aren’t signed in at the time.

Details on how much revenue the new strategy will bring in were not known yet.

The idea was first touched upon last year when CFO Anthony Noto said it would be possible to monetize logged-out users once the company “nailed the consumer experience.”

Twitter COO Adam Bain said on a post-earnings conference call in October that the company would run a pilot in the fourth quarter to monetize the logged-out users.

The promoted tweets and videos will be available on the desktop version of the website on profile pages and “tweet detail” pages.

The company is testing the feature with certain advertisers in the U.S., U.K., Japan, and Australia and plans to roll it out to more markets around the world.

Twitter, facing slowing user growth, has been experimenting under CEO Jack Dorsey to make the website more engaging.

In a few short months under Dorsey, Twitter introduced the “Moments” feature, added polls to tweets, laid off about 8% of its workforce and rolled out a “buy” button.

On Wednesday, the company said it was testing a feature where tweets would be sorted by relevance instead of reverse chronological order.

“The best thing to happen under Jack Dorsey would be the fact that they are going to rethink all aspects of their business,” Monness, Crespi, Hardt, & Co analyst James Cakmak said.

“Before it was a case of doing the same thing and hoping things change,” he added.