With hundreds of millions of users around the world, Twitter (TWTR) is one of the world's most popular social media sites. It has about 211 million global monetizable daily active users, making it the 16th most popular social network worldwide. Users post tweets and interact with each other using 280 characters or less.
The site has become a place for people to debate and share ideas and is a popular venue for many heavy users of social media. Many users discuss a wide variety of topics with others, from politics to news, to niche categories. Since the presidential election of 2016, the site has become one of the most popular places to share and break important news.
Since going public, the company has tried to stay ahead of the game by making strategic acquisitions, especially in the face of competition from other companies like Meta (formerly Facebook) and Snapchat. Some of these buys have been great; others, not so much. This article looks at the company's history, how it became what it is today, its financials, and some of the biggest companies it owned before it was sold.
- Since going public, Twitter made a series of acquisitions to try to remain competitive in the social media landscape.
- Twitter acquired Magic Pony Technology in 2016 to improve its machine-learning capabilities.
- Periscope was acquired by Twitter for $100 million of stock and cash.
- The company's largest acquisition—$479 million for digital advertising platform TellApart—was been a losing venture.
- Other acquisitions included Gnip, TapCommerce, and TweetDeck.
Twitter was founded in 2006 by a group of employees of the podcasting company Odeo, including Jack Dorsey, Noah Glass, Biz Stone, and Evan Williams. The idea for the company came from Dorsey, who wanted to create an SMS-based platform through which people could communicate. Twitter initially began with tens of thousands of users, limiting users to 140 characters per tweet.
The company went public on Nov. 7, 2013. It planned to raise $1 billion through the initial public offering (IPO) and exceeded that target by making $1.8 billion by issuing 70 million shares at $26 per share. Opening at $45.10, the stock soared as high as $50.09 before closing at $44.90 on that first day.
In April 2022, Elon Musk tendered an offer of $44 billion, or $54.20 per share, to purchase 100% of Twitter. The deal did not go through immediately due to several potential issues, namely an excess of bots, and the situation lingered for months. Almost six months later, on Oct. 27, an agreement was finally reached by Musk and Twitter's board, and Twitter was officially purchased by Musk for the original $44 billion.
The final full-year results for the company were reported in its 2021 annual report. The company reported $5.1 billion in annual revenue, an increase from the previous year, but Twitter reported a net loss of $221 million for 2021.
Because the company merged with Elon Musk's X Holdings I and II companies in 2022, there is no 2022 annual report.
Gnip was acquired by Twitter in 2014 in a cash and stock deal worth more than $134 million. The company was a social media application programming interface (API) aggregation company. It was among the first social media API-aggregation service providers and provided data to Twitter long before the acquisition. Twitter extended its own data platform as well as its existing public API as a result of the acquisition.
The startup company was founded in 2008 in Boulder, Colorado, with customers in about 40 countries. Before the acquisition, Gnip also provided data to rival social media platforms, including Facebook and Tumblr.
2. Magic Pony Technology
Twitter acquired Magic Pony Technology in 2016 in an effort to improve its machine-learning capabilities. The London-based company developed neural network systems for image-related data expansion. The acquisition was valued at $150 million, and both co-founders of Magic Pony Technology were retained in the deal. But the full terms of the deal were not disclosed by either party.
By acquiring the company, Twitter hoped it would improve the delivery of photos and videos across apps. Twitter received technology related to neural network development and machine learning to enhance video quality, expand a photograph’s size, and develop virtual reality graphics. This isn't Twitter's first time at the machine learning rodeo. The company acquired two other machine learning startups: Whetlab in 2015 and Madbits in 2014.
Twitter’s largest acquisition was a $479 million stock purchase to acquire TellApart in 2015. The digital advertising platform boosted Twitter’s advertising revenue generated by ads that resembled tweets and encouraged users to perform a certain action. In addition, TellApart specialized in targeting users to monitor usage across mobile and desktop devices.
This wasn't the best acquisition for Twitter. In 2017, the company said it stopped investing in TellApart and deprecated the subsidiary. Twitter had to incur restructuring charges related to TellApart.
Twitter acquired TweetDeck in 2011 for $20.4 million. The platform was a social media dashboard application for the management of Twitter accounts. TweetDeck was originally an independent app but was later merged into the social media giant's interface.
“TweetDeck provides brands, publishers, marketers, and others with a powerful platform to track all the real-time conversations they care about," a blog post by the company said of the acquisition.
The very first version of TweetDeck went live in 2008, three years before Twitter purchased the company. Although it did have mobile versions, the company decided to eliminate them and focus entirely on its web-based applications.