The BBC's Samira Hussain says it is hoped Twitter will "learn
some lessons"
from Facebook's stock market listing
Twitter says it plans to join the
stock market in the most hotly anticipated flotation since Facebook's last
year.
Referring to the official paperwork needed to join the market the company
tweeted: "We've confidentially submitted an S-1 to the SEC for a planned
[initial public offering]."
Investors value Twitter, founded in 2006 by Jack Dorsey, Biz Stone and Evan
Williams, at more than $10bn (£6.3bn).
Twitter gave no further details as to the timing or price of the
offering.
It is on track to post $583 million in revenue in 2013, according to
advertising consultancy eMarketer.
Once a company has filed paperwork with US regulators for a planned IPO it
enters a so-called "quiet period" when it is not allowed to speak with the
press.
According to the Securities and Exchanges Commission's
website, a company can file a confidential prospectus for a public share
sale if it is classified as an "emerging growth company" with revenue of less
than $1bn.
Mobile first
On Monday, Twitter said it had acquired
MoPub, a mobile-focused advertising exchange, for a reported $350m, as part
of its continued push to boost advertising.
"Twitter was more or less a mobile-first platform from the start and so the
company built its experience to work relatively well across devices," Clark
Fredriksen of eMarketer told the BBC.
"Ultimately, they did a good job of monetising their mobile user base."
Some speculate that the timing of the IPO has to do with the company's desire
to further grow - as well as with its desire to reward investors, who have
poured more than $1bn into the company.
"For one thing it gives its investors a way to get some of the money back
that they put into the company at the beginning," said Andrew Frank, social
media expert at tech advisors Gartner.
"It gives the employees a similar kind of event to reward them for the
success they've had so far.
"It gives Twitter itself extra funds to invest in new projects and
innovation. It also gives it the status of having a position on the stock
exchange, which of course puts the firm in a different league to a
start-up."
Learning from Facebook
"Twitter is one of the last of the major developed social networks to file
[for an IPO] - we've already had Facebook and LinkedIn," said Colin Gillis, a
New York-based tech specialist at BGC Partners.
Demand for Facebook shares was high when they first
listed,
but the share price has disappointed investors since then
Facebook listed on the stock market in May last year. Although it initially
created excitement among investors, its share price performed poorly, before
recovering this summer.
Mr Gillis said it was impossible to say how great the demand for Twitter
shares would be until the company released a valuation.
"There's a few issues [such as] how many revenue streams can be developed
beyond just advertising, the impact of more people accessing the service via
smartphones," Mr Gillis said.
Analysts say Twitter must continue to innovate under the scrutiny of public
ownership.
"One of the things they will have to focus on is making sure that they keep
their users very actively engaged," Nate Elliott, an analyst at the tech
consultancy Forrester, told the BBC.
"One of the things Facebook has done very successfully over the past year and
a half has been to show that not only is the number of users growing, but that
those users are becoming more active."
'This tweet is
going public?'
Twitter's tweet announcing its filing immediately went viral - it was
re-tweeted more than 8,000 times within an hour of its posting.
For many users, it seemed apt that the company would use its own platform to
announce the news.
"Naturally Twitter announces its IPO via Twitter. What other way?" one
read.
Twitter later sent a follow up tweet, which read simply: "Now, back to
work."