Home >Companies >Twitter expands Promoted tweet advertising beyond its site

San Francisco: Twitter Inc. is expanding its advertising base in a way that may affect how Wall Street sees the web company’s revenue prospects.

Twitter, which will report earnings on Thursday, has started displaying tweet-based advertising, known as Promoted Tweets, beyond its main website, the company said Tuesday in a blog post. The announcement buoyed the company’s shares, sending them up 6.2% to $39.79 at the close in New York.

Promoted Tweets will appear in the Flipboard mobile-news application and on Yahoo Japan. Twitter will share ad revenue with those sites, said a person familiar with the matter, who asked not to be identified because the company isn’t disclosing financial details.

Twitter, whose social network has about a fifth the users of Facebook Inc.’s, has sought to blunt concerns about slowing member growth by saying that its active user number—284 million in the third quarter—under-represents the wider universe of people who see the postings on news websites and apps. In that same period, the company said, tweets were seen 185 billion times on web properties Twitter doesn’t own.

The expansion of Promoted Tweets means Twitter will start making money from those eyeballs, as chief executive officer (CEO) Dick Costolo promised in November.

Investor shift?

Robert Peck, an analyst at SunTrust Robinson Humphrey, said the move could prompt a shift in investor sentiment on Twitter, just as many investors changed their view of Facebook’s prospects after that company figured out how to make money from mobile users.

“Once that perception was changed, investor sentiment switched dramatically and the stock began its ascent," said Peck, who has a buy rating on Twitter stock. In recent months, Peck speculated that Costolo might lose his job or that the company may be acquired. “Investors are overly bearish on Twitter today, much like Facebook back then."

A representative for Twitter declined to comment on the terms of the advertising deals. The San Francisco-based company has been taking steps to make it easier for websites and apps to display tweets by releasing software for developers. Over time, more of these sites that show tweets will also show Twitter advertising.

“We’ve been thinking a lot about how we can take the rich canvas of the Promoted Tweet and extend it beyond Twitter, to all the places where tweets go today," the company said in the blog post. “This is the first of many opportunities to create such campaigns."

Twitter didn’t release the product in time for numbers to show up in fourth-quarter earnings later this week, though Twitter has said that distributing its ads more widely could be a driving force of revenue in the future. Bloomberg

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