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Twitter is revealing more details about its planned initial public offering. Late this afternoon, the company announced its intention to raise a billion dollars by selling stock, and revealed detailed information about its finances for the first time. We're joined now by NPR's Steve Henn to discuss this peek behind the Twitter curtain. Hey there, Steve.
STEVE HENN, BYLINE: Hey.
CORNISH: So did we actually learn anything about Twitter this afternoon?
HENN: Yeah, we did actually. It's smaller than most people expected. It's not growing as quickly as many people thought, and it's losing money. You know, Twitter's CEO made comments late last year saying the service had roughly 200 million users and he expected it to double in size this year. But that didn't happen. Right now, Twitter has just 215 million users, which is a lot but it's a lot fewer than even the more conservative estimates that were floating around out there. Twitter is also earning less money than many social media analysts had thought. It's on track to bring in about a half a billion dollars in revenue this year, maybe a little bit more, and that's less than most people had been looking for. And the company is still losing money. According to the prospectus, Twitter lost $69 million in the first six months of the year. That's almost twice the burn rate of 2012.
CORNISH: Still losing money. Is there anything positive to say here? I mean, I'm assuming investors aren't fools, but clearly Twitter believes that there's an appetite for its stock. Why?
HENN: Well, Twitter actually announced its plans to go public last month in a tweet, but detailed information about its finances weren't revealed until today. And that was possible because of changes in the law enacted late last year which allowed smaller, so-called emerging growth companies to file confidential documents with the SEC and approach IPOs differently. So over the last few months, Twitter's been able to privately talk to large institutional investors about its business and gage whether or not there's an appetite for its stock. Obviously those discussions went well enough that Twitter felt comfortable pushing ahead. So what the investors see in Twitter? Well, even though it's not growing as fast as many had assumed, it's still pretty enormous. It has an audience of 215 million people, and that audience is highly engaged. They use the service a lot.
But what's most appealing is that Twitter's revenue has been growing and growing really quickly. And while Facebook struggled to figure out how to adapt its business to mobile phones, Twitter says mobile is the primary driver of what it does. Twitter on a mobile phone just works. They've been very successful selling ads there. And I think investors are attracted to that.
CORNISH: Now, you mentioned Facebook. I remember that company's IPO was widely viewed as a disaster, frankly. And Facebook's share fell immediately after its IPO. How has that affected the way Twitter is approaching this?
HENN: Well, I think that everything Twitter is doing it's doing with Facebook's experience in mind. When I talked to folks at Twitter about this process, Facebook comes up again and again. They say they chose to file confidentially at first because they wanted to tamp down the hype around the event, which is tough if your business is to create an online hype machine. But, you know, I also think they're approaching the IPO differently. Facebook was clearly focused on raising as much money as it could at the best possible price. My impression is that Twitter may err in the other direction by deliberately keeping the size of its offering smaller so they have some appetite for their stock even after the IPO in the hopes that that will prop the share price up.
CORNISH: That's NPR's Steve Henn. Steve, thanks so much.
HENN: My pleasure.
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