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Five questions answered on Twitter’s bid to raise $1bn from the stock market

Twitter has revealed plans to try and raise $1bn (£619m) in its stock market debut. We answer five questions on Twitter’s stock market flotation plans.

Twitter's logo displayed on a computer screen
Around 85 per cent of Twitter's revenue last year came from ad sales. Photo: Getty

Why is Twitter looking to raise $1bn from the stock market?

Despite major success seven-year-old Twitter has never made a profit.

Its revenue has grown from just $28m in 2010 to $317m by the end of 2012. However, in the first six months of 2013 it made a loss of $69m.

Do analysts think Twitter will get a good response?

Yes. Internet analyst Lou Kerner speaking to the BBC said:

Social media is red hot.

Twitter is front and centre benefiting from market enthusiasm for all things social, and remarkably strong metrics.

Where does Twitter’s revenue come from?

The social networking sites finances have been revealed for the first time thanks to the stock market filing.

It reveals that around 85 per cent of Twitter's revenue last year came from ad sales, while the rest was from licensing its data.

A significant slice of its ad revenue comes from mobile devices.

As of 2013, over 65 per cent of the company's advertising revenue was generated from mobile devices.

What other Twitter related facts have been revealed?

The stock market filing revealed that Twitter now has 218 million monthly users and that 500 million tweets are sent a day.

More than 75 per cent of Twitter users accessed the site from their mobile phone during that same time period.

It also revealed that co-founder Evan Williams has a 12 per cent stake and other co-founder Jack Dorsey a 4.9 per cent stake in Twitter, which could mean they could stand to take significant sums from the company's stock market listing.

Benchmark Capital's Peter Fenton, an early investor in the company, is the second-biggest shareholder, with 6.7 per cent of shares.

So, overall is Twitter’s stock market plans good news for its users?

"Users should be happy about this," said Zachary Reiss-Davis, an analyst with Forrester told the BBC.

"It looks like Twitter is looking at how to enrich the experience and it understands that to build a successful service, they have to create something people like and want to come back to and spend time on."