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Twitter to Wall Street: We're Big Now -- And We'll Be Really, Really Big in the Future

That's a hard sell, but Dick Costolo is pulling it off after a big Q2.

Asa Mathat
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

In the wake of a big Q2, Twitter had two messages for Wall Street today:

  • We’re going to get much much bigger, by taking advantage of an audience that’s much bigger than our user base.
  • But that’s not going to happen anytime soon! In the meantime, we’re going to make a lot of money from the 271 million users we have.

Is that confusing to you? Wall Street seems okay with it, for now: Twitter’s stock, which had shot up some 30 percent before the company’s earnings call today, remained at that level by the time Dick Costolo and his lieutenants were done talking.

Here’s their argument in a little more detail: Costolo told analysts that Twitter is really two to three times bigger than its 271 million users, because so many people come to but don’t log into the service, and so many people see tweets on TV and on other websites.

But Costolo also told analysts that Twitter doesn’t make any money from those extra users, and doesn’t plan on changing that anytime soon. The first job is to focus on its core user base — both in terms of keeping it happy and making money from it — and expanding that base as well.

Costolo also spent a lot of time talking about the World Cup, which was not a surprise. But again his messaging might seem mixed unless you were paying attention: Costolo said the company’s focus on promoting the soccer tournament was a big success in getting users to spend more time on the service — but that the games didn’t add more users.

Translation: Yes, big events are big for us — but no, we’re not dependent on them for growth. You don’t have to wait another four years for another good quarter from us.

Costolo also pointed to Twitter’s World Cup efforts — for instance, customized pages for the games and teams — as a clue about how it would make money from its more casual visitors down the road. And in the next breath, he made sure to explain that this wasn’t happening in the near term.

Our business is very big! And with some imagination, you can imagine it getting much, much bigger one day!

That’s a hard sell for lots of folks to make. But it looks like it’s working for Costolo today.



Turns out the old metrics Twitter was using to describe its size did just fine –at least for one quarter: Twitter’s Q2 beat Wall Street expectations for revenue, earnings and use growth, and the stock is flying.

Now it’s time for CEO Dick Costolo to convince investors that this wasn’t a one-time affair. We’ll be covering his earnings call live, below:

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