This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Twitter's $13 Million Opportunity

NEW YORK (TheStreet) -Twitter's (TWTR) smallest source of revenue, the social network's data licensing arm, may be an important piece of the company's earnings that investors should pay attention to as the burgeoning communications powerhouse matures.

As it currently stands, Twitter's data licensing revenue is expected to come in at between $13-to-$15 million in the fourth-quarter, according to a range of estimates provided by analysts. That represents minimal year-over-year growth, and is about the only thing that may be fairly predictable in Twitter's first quarterly earnings report as a public company.

Analysts forecast that the company will generate about $218 million in fourth quarter revenue, and a negligible adjusted profit or loss for the quarter.

Other issues such as Twitter's valuation, the trends of its user and revenue growth, and whether or not the company can beat Wall Street consensus appear far harder to gauge.

Data licensing, however, is an area that could become a source of stability for the company in coming quarters. Twitter offers data licenses partners to access, search and analyze historical and real-time data on our platform. User have ample data to pore over. There have been over 350 billion tweets on the network.

But it doesn't appear that Twitter has been making much progress with its data licensing even as more and more data crosses the network. Single digit or mid-teens licensing revenue growth would mark far slower growth than Twitter's advertising platform, its biggest source of earnings.

In an age of big data and analytics-based decision making, the insights that Tweets could give into consumer habits, trends and even investment ideas seems like an opportunity for the company. It could also be an important source of diversification from volatile advertising revenues.

But, as it currently stands, Twitter's earnings are a bit of a black box and mostly reliant on advertising.

Twitter generates nearly all of its advertising revenue through the sale of Promoted Tweets, Promoted Accounts and Promoted Trends. The majority of those revenues are conducted on a pay-for-performance basis.

It is unlikely investors or even the company will have a firm handle on the long-term prospects of Twitter's advertising platform, especially on mobile devices for many more quarters.

Data licensing, however, could be far more predictable. Unfortunately, according to Twitter's S-1, the company expects data licensing to decrease as a percentage of its overall revenue over time.

At between $13 million-to-$15 million in quarterly revenue, data licensing currently looks like a missed opportunity for the fast-growing platform.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs