Twitter, as one of the world biggest online social networking service provider, has troubles on their financial statement. It shows that twitter has made deficit on their business. They lost about $79.4 million on $317 million in sales in 2012.

As the aim of running the business, the managers decided to raise $1 billion on in its stocks market debut. Why do managers of twitter make such decision?

The twitter company is keeping growing these years, the data shows that there is over 200 million users sent over 400 millions twitters per day. The current outstanding number of users in Twitter led most of the businesses advertised their products on the website which then drives up Twitter’s annual revenue. However, some experts point out that twitter shouldn’t rely on selling advertisements. As the growing rate of increasing users is declined, twitter must carry out other strategies for earning profits.

Additionally, Facebook as a competitor to Twitter, threats the growth of Twitter. According to the data on 2011, Facebook actually earned more profits than Twitter. Since more and more people using Twitter and Facebook on electric devices, Twitter should seemed this as an opportunity to compete with Facebook.

Reference:

“Twitter wants to raise $1bn in its stock market debut.”BBC NEWS Business (2013): n.pag. BBC. Web. 6 Oct 2013.

“Twitter not yet profitable.” BBC NEWS Business (2013): n.pag. BBC. Web. 6 Oct 2013.

“More Twitter ads are coming soon.” BBC NEWS Business(2013): n.pag. BBC. Web. 2 Oct 2013.