Dick Costolo can see the future for Twitter Inc., and it lies in a growing number of outposts around the world – Canada included – where the service’s popularity is still taking off.
The chief executive of the social networking platform was riding high on Tuesday after his company beat expectations on user growth and revenue, sending its shares soaring higher in after-hours trading on the New York Stock Exchange. The stock climbed as high as $48 (U.S.), before closing Wednesday at $46.30, up nearly 20 per cent from Tuesday’s close.
The latest numbers have forestalled some concerns about slowing growth in previous quarters, which had left many investors and analysts pessimistic about Twitter’s potential for mass appeal. In conversation with Mr. Costolo there is no hint of that doubt, however, and he reiterates often that “reach every person on the planet” is still entrenched as one of his company’s core goals.
“So these countries like Canada that are some of our fast-growing markets are super important to us, and we’re going to invest in them,” Mr. Costolo said in an interview.
It is precisely those sorts of investments that explain why Twitter’s net loss for the second quarter swelled to $145-million (U.S.), even as its quarterly revenue jumped 124 per cent from the previous year to $312-million.
The company’s global staffing has more than doubled to 3,300 from about 1,500 a little more than a year ago as it built headquarters in more countries to anchor its local business. Canada is a prime example, growing from its first employee to 20 in its first year, and expecting to reach a headcount of about 30 by summer’s end.
Twitter still won’t talk about the specifics of its performance in different countries, conceding only that the U.S., Britain and Japan are the biggest revenue drivers. But Canada is squarely in the “fast-growing” category, and Mr. Costolo was tickled to see Canadian basketball fans rally around the Toronto Raptors’ late-season run using the #WeTheNorth hashtag.
“I seem to see, on a regular basis, some new way that Canadian media and businesses there and government officials are using Twitter as a tool for everything we like to see it used for,” Mr. Costolo said.
But there are still hurdles ahead for the company, he added, and “We know that we have a lot of work to do.”
Many of the next steps will come in the form of further refinements to the user experience, such as simplifying the sign-up process. Twitter is also eager to build new ways to organize tweets around topics and live events, bolstered by its success during the 2014 World Cup, which prompted a record 672 million tweets.
Priority No. 1 is getting “value” to new users as soon as they first log in by building a timeline “that helps them understand” what it is devoted users love about the platform.
But there are elemental barriers to faster user growth that Twitter must figure out how to break down, which are common to Canada and every other country of tweeters. One such deterrent is the perceived pressure to tweet.
“I think it’s fair to say there’s still a large population of people who, if you ask them why they don’t use Twitter, they’ll say, well, I don’t want to tweet, I don’t want to publish,” he said. “The one misconception that’s out there … is that you have to come to the platform and jump in as a publisher. And as we know from so many people who come to Twitter and use it every day as a consumption vehicle, that’s not the case.”
That will prompt the company to put a greater focus on the hundreds of millions of visitors to Twitter each month who never sign up or log in, but browse its tweets on the Web.
Though its 271 million monthly active users still pale in comparison to its largest competitor, Facebook Inc., Mr. Costolo still fervently believes that, tweak by tweak, his company can attract the largest audience over time.
“I think about it in a long arc of being able to deliver the very best experiences in service to making Twitter the very best way to keep up with the world,” he said. “There’s a big, big distance between where we are today and where we want to be.”