The changes at Twitter Inc. (TWTR) continued last week as the beleaguered social media company hired a new managing director for its China operations. The new  hire has left many bewildered as Twitter's service hasn't been granted access in China, meaning the company still can't reach the country's users directly. But does Twitter have something else up its sleeve?

The Golden Opportunity Awaits

In a tweet sent last Thursday, CEO and co-Founder Jack Dorsey announced that Kathy Chen had been hired as Twitter's Greater China managing director. Chen, who has previously held positions at Cisco Systems Inc. (CSCO) and Microsoft Corp. (MSFT), is expected to oversee operations at Twitter's office in Hong Kong. 

According to Shailesh Rao, Twitter's vice-president for Asia-Pacific, Latin America and emerging markets, Hong Kong is an important growth driver for the company. "We've seen a 340% growth in the number of advertisers [using Twitter in Hong Kong], and the types of advertisers are diverse," Rao told the South China Morning Post. "Because of the success we've seen, we want to expand the investment we're making."

This is an impressive growth rate, especially since Twitter's service has been blocked on the mainland since 2009. Despite being blocked, however, that region (Asia Pacific) not only accounts for Twitter's largest audience (based on total number of active users), the company says it is its fastest-growth area in terms of active user growth. But is there anything more to this move, especially since Dorsey felt it necessary to tweet about it? (For more, see also: Twitter in the Crosshairs.)

"Dorsey's tweet about the subject indicates that Chen's hire is important for the company," said Scott Kessler, an analyst at S&P Global Market Intelligence. "It's really too early to say what the kind of operational or financial impact will be," he clarified.

Nonetheless, given the strong list of brands and companies that operate in the region, including names like Lenovo Group Limited (LNVGY), Twitter has become an important advertising mechanism for those companies, many of which aim to reach a vibrant audience. This is something to keep an eye on for when Twitter announces earnings results on April 26. 

The Bottom Line

Twitter's success in China would explain why Facebook Inc. (FB), which is also blocked in China, recently met with China’s propaganda chief Liu Yunshan. With its new hire, is it possible that Twitter is racing to create a first-mover advantage over Facebook? The company recently turned 10 years old and it now appears Twitter, including its recent partnership with the NFL, is ready to get out of its comfort zone. (For related reading, see: Twitter Still an Adolescent After 10 Years.)

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