Twitter is having a good year. Acquisitions, new hires, a growing user base and impressive revenues are all adding to the chatter surrounding the latest social media IPO.
As everyone wonders what’s next for the little blue bird, answers can be found in the company’s history. Billions of tweets after its conception in 2006, Twitter has swayed elections, shattered records and really pissed off Alec Baldwin.
See also: Twitter’s IPO Filing: What It Means
So from egg to IPO, we give you Twitter.
Odeo and Twttr
Twitter’s story starts at Odeo, a podcast service startup founded by Noah Glass and ex-Googler Evan Williams. The startup was a product of Glass’s idea — that a message recorded on a phone could be converted into an MP3 hosted on the Internet — and Williams’ money, along with the money of about a dozen other investors. But the company wasn’t making much headway, and in an attempt at reinvention, Glass and Williams held a daylong brainstorming session to generate new ideas.
It was during this session that Jack Dorsey first introduced the idea that would become Twitter. Dorsey’s idea was that one individual could, using SMS and a specific number, send a message out to a small group of people via a public network. The number became “40404,” the project became “twttr,” and a social media network was born.
So Dorsey, Biz Stone and Florian Weber, managed by Noah Glass, set out to build it. At 4:50 PM on March 21, 2006, Jack Dorsey sent out the first tweet:
just setting up my twttr
— Jack Dorsey (@jack) March 21, 2006
Tweets for All
After a few months of practice as interoffice communication at Odeo, twttr was released into the wild on July 15, 2006. In a world of T9 text input on Razr flip phones, the public didn’t quite grasp the use of the product. Cue this early product video posted to Noah Glass’ Youtube account, featuring Biz Stone:
TechCrunch covered the service, implying that perhaps Odeo should stop creating fun “side projects” and instead focus on their own failing product.
Twttr then had its first surge in popularity in August, gaining thousands of users when people took to the social network to spread the word about an earthquake in San Francisco.
New Management
In September 2006, Evan Williams approached the investors of Odeo with an offer. Odeo was going nowhere, that much was obvious. The launch of iTunes with an included podcast platform had all but sounded the death knell for the company, not to mention the fact that the founders realized they didn’t really care about podcasts in the first place.
Williams approached the investors with an offer: To prevent them from taking a loss, he would buy back their shares of the company. In undoubtedly the biggest financial mistake of their lives, the investors agreed.
Odeo, and twttr, now belonged to Williams.
Odeo became Obvious Corp., twttr rebranded itself as Twitter and, in a controversial move, Williams fired Noah Glass, one of Twitter’s earliest champions and who Business Insider called “Twitter’s Forgotten Founder.” Some accounts imply that Glass played a role almost as large as Dorsey’s in the creation of Twitter — Glass is credited with the name and much of the early work on the site — even saying that without Glass, Twitter would never have been created.
See also: 25 Twitter Accounts That Will Make You Smarter
Potential reasons for Glass’ termination vary, from a volatile personality to overzealous vie for control over Twitter, but Glass admitted in an interview that while he felt “betrayed,” he didn’t leave the company empty-handed. While Glass’ severance remains undisclosed, he has said of the matter, “I came away with something. If I’d stayed, if it would have gone the other way, I would have come away with a lot lot more.”
Twitter had spun off into its own company by April 2007, with Jack Dorsey as CEO, but it wasn’t until the South by Southwest Interactive (SXSWi) conference that Twitter really hit the social media map. Two 60-inch plasma screens set up in the conference hallways streamed only Twitter messages, and thousands of tweets silently overtook SXSWi. By the end of the conference, the number of tweets per day had tripled from 20,000 to 60,000.
SXSWi gave Twitter the momentum it needed to grow. And it did grow, exponentially, from 400,000 tweets posted per quarter in 2007, to 100 million tweets per quarter in 2008. In March 2009, Nielsen Online reports indicated that Twitter grew 1,382% year-over-year in February, numbers impressive enough for even Facebook, which was then getting 65.7 million unique visitors per month, to take notice. Facebook’s updated, real-time Homepage seemed like a direct response to Twitter’s unprecedented growth.
Revenue Model and Promoted Tweets
Twitter’s increase in popularity also came with increased scrutiny. Dorsey had stepped down from his CEO position in October 2008 to serve a less intensive role as chairman of the board. Williams had assumed the role of CEO, and reached out to Dick Costolo, another ex-Googler, to act as COO in September 2009, in an attempt to quell the belief that Twitter wouldn’t survive at a huge scale without a business plan. Then Twitter’s growth flatlined unexpectedly in the summer of 2009, while social juggernaut Facebook and YouTube’s numbers continued to rise steadily.
Costolo ushered in a new era of revenue growth from a new form of advertising: promoted tweets. Promoted tweets, what Costolo called a hybrid between “earned media” and “paid media,” were the first stage of Twitter’s advertising platform, revealed at the first official Chirp Conference in San Francisco in April 2010.
The new feature offered a chance at real-time promotion, multiple ways to measure user engagement with a tweet and, for customers, the idea that ads that weren’t “resonating” through retweets, clicks or favorites would be dropped from the rotation. Most importantly, Twitter was now making money.
Williams Steps Down
Costolo’s success with promoted tweets was an outward indication of his own deep integration with Twitter. In fact, he became so ingrained in the company that the other founders referred to him as a co-founder, despite the fact that he joined the company three years after the first tweet.
Then in 2010, Evan Williams posted on the Twitter blog that he would be stepping down as CEO, choosing to focus instead on the product end of the company. Dick Costolo would take his place. While it was widely agreed that this change would likely mean Costolo and Williams splitting executive duties between the two of them, there was no doubt that Costolo was now behind the wheel.
Image: Twitter
The change made sense. Twitter had produced a popular product through product-CEO Evan Williams — he had created new features, an updated website design and had helped to build the product from its humble beginnings at Odeo to a social network generating millions of interactions between users per day. But what Twitter really needed in 2010 was a business model, and Dick Costolo had already taken major strides toward securing one.
Promoted tweets were just the beginning. In 2011, Twitter doubled its acquisitions, focusing on search and discovery, social analytics, and advertising. The acquisition of the Tweetie client from Atbits in 2010 also produced official Twitter apps for iOS, Android and BlackBerry, causing Twitter usage to skyrocket once again. By January 2011, 40% of all tweets were coming from mobile.
Costolo gave Twitter something it hadn’t had prior to his appointment as CEO: direction. He focused on Twitter as an information network, rather than just a social network. As rumors started to circulate about a Facebook phone, Costolo shrugged off the idea of a Twitter phone.
“Twitter already works on every device you’re going to hear about this week,” he said at Mobile World Conference in February 2011. “Tweets flow seamlessly across platforms; that’s what we’re trying to accomplish.”
See also: 25 Twitter Accounts to Make You Laugh
As Twitter continued to thrive under Costolo with its new found sense of direction, new features emerged, such as photo and video sharing. However, much of the focus was on perfecting the features and revenue streams that Twitter already had. As Twitter continued to acquire smaller startups to improve its existing features, promoted tweets — which had expanded to promoted trends and promoted accounts as well — continued to build impressive revenue. Some reports expect the company to generate more than $1 billion in ad revenue by 2014.
The company also developed a spam problem, which still to this day presents a challenge as the number of spam accounts continues to rise.
Despite these challenges, Twitter achieved a new level of success through journalism. Twitter played a crucial role in the 2012 election, the digital revolution in Egypt that resulted in President Hosni Mubarak to stepping down and confirmed early reports of the death of Osama Bin Laden.
Twitter’s relationship with the media is equal parts love and hate. Social media sites have become the best way to get the news first (most likely, as events unfold), and nothing does it better than Twitter. The immediacy of its constantly refreshing feed has made it the best source of breaking news, whether it’s celebrity gossip or political discord.
Vine and Twitter Music
While most of Twitter’s acquisitions have gone on to enhance Twitter’s core features, two startups are noteworthy for expanding on the platform in a unique way.
Image: Vine
First up, Vine. Dick Costolo summed it up pretty well in an interview with The Wall Street Journal shortly after Vine’s acquisition: “When Facebook bought Instagram, I said we’re not going to do what those other guys did. We’re looking for the next thing. We all agreed that this is the next thing down the road.”
And Vine has certainly been a success story for Twitter. The versatility of the platform has made it popular with average Joes and major brands alike, cutting news stories, contests, fashion shows and ads down to six-second clips of digestible content, not to mention the wealth of unique, user-generated content that appears on the app every day. Even when Instagram released Instagram Video to compete with the brand, Vine has remained popular among users.
Twitter Music also stemmed from the acquisition of a startup, We Are Hunted, in April 2013. We Are Hunted specialized in following music trends, an interest it shared with Twitter Music. Twitter Music focuses on music discovery in a way that makes it unique from other sites like Pandora and Spotify, by displaying only songs that your friends are tweeting out, so you don’t get recommended a song just because your buddy listened to it once. The website is fun to use and gorgeous to look at, and a good sign if it’s any indication of products to come.
Twitter Today
Twitter continues to shatter user records, bring us the latest news, enrage celebrities and spoil our favorite TV shows.
However, the numbers aren’t as impressive as promised. While Twitter is still experiencing a 30% growth since last year, it’s far from the projected 100% growth that CEO Costolo projected.
In July, Twitter’s newest ad product, called “Twitter Amplify,” brought a new method for media brands and advertisers to promote television ads on Twitter. Brands can even track their campaigns with the new TV Ads Dashboard. The product has reportedly earned successes of up to 27% higher than historical average ratings of message association, brand recall and purchase intent for brands such as Jaguar and Samsung.
What Next?
So on the eve of Twitter’s proposed IPO, the biggest question is where the company is headed once it goes public.
First and foremost, Twitter will be looking to add more users. The site is popular, yes, but only among 18% of adults in the United States. When compared to the 50% of U.S. adults on Facebook, that number appears a bit lackluster.
The reason for this is clear: The barrier to entry is greater on Twitter, with its seemingly complicated system of hashtags, @ mentions and specialized lingo. The site’s latest attempt at solving part of this problem, the blue lines that connect conversations, have been met with a mostly negative response from users.
Another direction Twitter seems to be taking is social television. As new episodes of Breaking Bad and Orange Is the New Black rock the Twittersphere with users’ live tweets, the social network will be looking for a way to harness this natural relationship into revenue through its advertising. Recent startup acquisitions, including social TV analytics pioneer Bluefin Labs, seem to confirm this.
And finally, it’s a safe bet that Twitter will continue to perfect its existing services, as the site has consistently done in the past, looking for new ways to improve on the features users love and get rid of the ones they hate. Hey Twitter, if you’re looking for some suggestions, we have some for you.
What do you think Twitter should focus on as it moves toward IPO? Let us know in the comments, and don’t feel like you have to keep it to 140 characters or less.
1. Summize
July 2008 — Twitter’s very first acquisition, Summize, was one of the first Twitter-centric search engines, which Twitter turned into search.twitter.com.
Image: Summize
2. Values of n
November 2008 — Just as they were batting off offers of acquisition from Facebook, Twitter made an acquisition of its own, Values of n. The startup produced information management applications like Stikkit, a post -it note application, and I Want Sandy, an email assistant. Primary motive for the acquisition appeared to be CEO Rael Dornfest, who still works at Twitter as a UX engineer.
Image: Values of n
3. Mixer Labs
December 2009 — Just as everyone from Google to Facebook was getting into location based services, (there was a time before Google Maps, believe it or not), Twitter acquired Mixer Labs to keep themselves in the game.
Image: Mixer Labs
4. Atebits
April 2010 — In an attempt to get some of the outside developers creating tools under its own wing, Twitter acquired Atebits, maker of the Tweetie app for Mac and iPhone, marking Twitter’s push into the mobile space.
Image: Atebits
5. Cloudhopper
April 2010 — Cloudhopper, a mobile messaging platform, became Twitter’s next acquisition, beefing up Twitter’s messaging volume capabilities.
Image: Cloudhopper
6. Smallthought Systems
June 2010 — Twitter acquired analytics startup Smallthought Systems for two reasons. First, Dabble DB, a program designed to help companies analyze spreadsheet data in different ways. Second, Trendly, a tracking service that helps companies track important changes in Google Analytics data.
Image: Smallthought Systems
7. Fluther
December 2010 — As Twitter’s team continued to grow exponentially, Twitter acquired Fluther, bringing four engineers and one designer to the Twitter flock. Fluther is a question and answer service that is still operational today.
Image: Fluther
8. TweetDeck
May 2011 — For a cool $40 million, Twitter picked up TweetDeck, a third party developer dashboard application, which quickly became a favorite among power users, which it remains to this day.
Image: Tweetdeck
9. Adgrok
May 2011 — The team at Adgrok shut down their servers to work on Twitter’s monetization platform full time.
Image: Adgrok
10. BackType
July 2011 — Later that same summer, Twitter acquired BackType, a social analytics tool that aimed to bring social media to the foreground to assist with business decisions. Backtype joined Twitter’s platform team to develop tools for Twitter’s publisher partners.
Image: Backtype
11. BagCheck
August 2011 — In an unusual acquisition, BagCheck joined the Twitter team. While the site is still available, one employee, Sam Pullara, moved to the Twitter engineering team.
Image: BagCheck
12. Julpan
September 2011 — Julpan’s acquisition by Twitter came with a new, real-time social search engine.
Image: Julpan
14. Summify
January 2012 — Twitter kicked off 2012 by picking up Summify, a social aggregation service that collects news stories from your various social networks and puts them in an easily consumable daily summary.
Image: Summify
15. Dasient
January 2012 — Twitter did another security boost with its purchase of Dasient, a startup which monitored websites for malicious codes, keeping them on or off dreaded security software blacklists if needed.
Image: Dasient
17. Hotspots.io
April 2012 — A month later, Twitter acquired Hotspots.io to join the revenue engineering team to develop analytics tools for Twitter’s advertising and publishing partners.
Image: Hotspots.io
18. RestEngine
May 2012 — Personalized email marketing provider RestEngine was the next to join the Twitter flock. The startup was the forerunner in personalizing and running re-activation, merchandising, cross-promotion and viral acquisition email campaigns.
Image: RestEngine
19. Nclud
June 2012 — While not a true acquisition, Nclud did sell some intellectual property to Twitter in 2012. Additionally, the two co-founders of Nclud moved on to high level design roles at the social media site.
Image: Nclud
20. Clutch IO
August 2012 — Twitter announced in August 2012 that its next acquisition would be A/B testing service Clutch.io. In addition to the native app A/B testing service for iOS and Android, Clutch also provided a toolkit for developing hybrid native/HTML apps for iOS, undoubtedly an important gain for Twitter.
Image: Twitter
21. Vine
October 2012 — In what was certainly its most famous acquisition, Vine, Twitter took a gamble on what the “next big thing” in social media would be — a gamble that seems to have paid off.
Image: Vine
22. Cabana
October 2012 — In that same month, Twitter bought mobile app platform Cabana and promptly shut it down in December, using the talent to help expand the company’s platform development operation.
Image: Cabana
24. Bluefin Labs
February 2013 — Social TV analytics pioneer Bluefin Labs joined Twitter in February, proving that Twitter is doubling down its efforts in social TV, where the network has been extremely successful.
Image: Bluefin Labs
26. Ubalo
May 2013 — Relatively unknown scalable computing startup Ubalo became the next to join Twitter in May. The startup simplified large scale computing down to just the code needed for analysis or processing and eliminating the worry of integration or scaling.
Image: Twitter
27. LuckySort
May 2013 — Again focusing on data, Twitter acquired LuckySort, a startup with a specialization in data visualization. The company’s product, known as TopicWatch, allowed users to analyze real-time trends on social media (including Twitter) and news sources. The startup moved to Twitter’s HQ in San Francisco and shut down its own services.
Image: Twitter
28. Spindle
June 2013 — Known as “the discovery engine for the social web,” Spindle marked an important acquisition for Twitter at the beginning of the summer, following in the site’s 2013 theme of acquiring data analytics startups. Spindle shut down as part of the acquisition and has moved to Twitter’s San Francisco offices.
Image: Spindle
30. Trendrr
August 2013 — In another bid for social TV, Twitter purchased Trendrr, a measurement and analytics service focusing on real-time social data for media and advertising.
Image: Trendrr
31. MoPub
September 2013 — Finally, in its most recent acquisition, Twitter bought MoPub, a startup that helps clients monitor their mobile advertisements. This unsurprising acquisition is reportedly to help further develop the native advertising ecosystem, which will likely bolster revenue streams for the coming IPO.
Image: MoPub
Image: iStockPhoto, funkydata