What Can Twitter Inc (NYSE:TWTR) Achieve In Hong Kong?

Twitter Inc (NYSE:TWTR) disclosed that it has opened an office in Hong Kong. The step was widely expected as the company has been talking about it. The move into Hong Kong means a lot for the microblogging company that generates most of its revenue from selling advertisement. Twitter, Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOGL) are banned from operating in mainland China.

Have analyst identified a strong buy signal for TWTR?

Pursuit of ad revenue

The reason Twitter Inc (NYSE:TWTR) has moved to Hon Kong is that the company hopes to expand its revenue stream. As much as the site is banned in mainland, the microblogging site provides an opportunity for Chinese companies to reach global audience.

Chinese companies such as Huawei Technologies and new agency Xinhua already use Twitter for global outreach. There are many companies in China that Twitter can woo to advertise on its platform. A Hong Kong office will be a great location for the company to tap advertisement opportunities in the Greater China region.

Twitter boasts about 288 million active users. The company also said it has more than 500 million unregistered users that come to the site every month. In the recent times, Twitter has been making efforts to properly monetize its user base. The company announced content syndication agreements with Yahoo Japan and Flipboard to give advertisers greater exposure and boost its revenue. In another step, Twitter entered into content sharing agreement with Google, a development that is expected to bring more Internet users to Twitter and enable the company to monetize unregistered visitors.

With its expanding global reach, especially through content syndication deals, Twitter hopes to convince Chinese companies to channel their advertisement money to its platform. In the most recent quarter, 4Q2014, Twitter posted $479 million of advertisement revenue.

Improving the platform

Twitter Inc (NYSE:TWTR) is not only wooing advertisers globally to expand its advertising streams, the company also continues to improve its site so that it can tap more users and encourage them to spend more time tweeting. It recently launched a number of features to support that goal, including Recap, a feature that enables users to catch up with the tweets they may have missed. There is also native video recording feature that seeks to encourage users to share and consume video content within the platform.

Twitter Inc (NYSE:TWTR) opened the day at $47.23 and is currently trading at $46.41.

About the Author

Michael joined US Markets Daily in 2009 and is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments.

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