Twitter (TWTR) Management Presents at Citi 2014 Global Technology Conference (Transcript)

| About: Twitter, Inc. (TWTR)

Twitter, Inc. (NYSE:TWTR)

Citi 2014 Global Technology Conference

September 3, 2014 5:00 p.m. ET

Executives

Anthony Noto - Chief Financial Officer

Analysts

Mark May – Citigroup

Mark May - Citigroup

I am Mark May. I’m the internet analyst at Citi. It’s my pleasure to welcome Anthony Noto, CFO of Twitter. Thanks for participating in the conference this year.

Anthony Noto

Thanks, Mark.

Mark May - Citigroup

This is the last session of the conference today. So we’re planning on keeping Anthony as long as today. These sessions are always much, much better is they are interactive and you guys are asking questions. I’ve got some here and if you are shy, but I am hoping that’s not the case.

But maybe just to get started, Antony, since you are relatively new at the company, give us a sense of what were key selling points that brought you to Twitter, what got you excited about the opportunity?

Anthony Noto

I would say the magnitude of the opportunity and then also the people. I was the banker of the IPO. I covered the company for the better part of four years, when we entertained the idea of me joining as CFO and so I had a pretty close relationship with the company and seen the company goes through a lot of evolution in that four year time period. But it’s also been an opportunity to get to know the executives on the team. From an opportunity standpoint, what I would say is it’s very rare to see a company with circa $30 billion market capitalization with so much growth and opportunity ahead of it relative to what it earlier had accomplished, I think it’s very rare to get to a $30 billion valuation and still have so many innings ahead of them in terms of user growth, in terms of monetization opportunity, geographic expansion and product expansion.

On the user side, we have a goal of having the largest daily audience in the world and helping individuals connect to their world and that vision and that very aspirational goal reflects of what we think the opportunities in front of us, and that was a big factor in my deciding.

The second point would be in many cases when you have a job transition, you don’t really know the people you’re going to work with. Yes, you probably had dinner with them a dozen times, or going to sporting events, other entertainment things, but I’ve had a chance to be in the foxhole so to speak with Dick and Mike through the IPO process when we were tired and we were hungry and frustrated and saw the good and the bad, gives you real insight to the type of people that you’re going to work with and I think that combined with the opportunity was what created a real unique opportunity for me.

Mark May - Citigroup

Okay. And you obviously know the company quite well, having worked with them from the outside for quite a while. What – what surprised you the most once you’ve kind of gotten into that foxhole? I don’t think Dick is listening right now. So feel free to –

Anthony Noto

I would say that – two things. One, the openness. And I will come back to it in a second. Then the singular focus, and on our operating committee which is a group of all the key functional area heads and obviously Dick, everyone is either new to their job or new to Twitter other than really Dick and Adam Bain who has been a great asset for the company and really a bright shining star throughout its evolution. And there is an incredible openness among all those people to take Twitter to the next level in this cap and everyone had a very singular focus on that. In addition to that singular focus and passion, if I had said to one of my friends, I am going to a $30 billion company and we’re going to be able to work on corporate strategy and structure our planning process or priorization process, allocate resources and hold accountability and really literally run that [indiscernible] you’re going to have that type of flexibility for a $30 billion company but the company was looking for that type of structure and the planning process, and that was very – it was very welcoming to have people that were so open given something that’s already so big. So that was probably the second big surprise. You think the body is going to set the transplant and it can offer -- we’re going in, so far it’s been great.

Mark May - Citigroup

And there have been some organizational and personnel changes at the company recently. Maybe if you could walk us through kind of what some of the reasons behind those were and kind of what the aim of those changes were.

Anthony Noto

Yeah, I would say the changes from a management standpoint fall in several different buckets that are typical of management changes. And there is no one answer to any of them. Sometimes the company continues to grow and the talent and capabilities of those in certain leadership positions don’t grow with it, and you have to make change. Sometime individuals have achieved whatever objectives that they have professionally or personally. So they have made a change now to go to the next evolution of the company and sometimes there are just philosophical differences on what the strategy is. And we have been very clear in stating over the last couple of months that it’s our goal to reach the largest daily audience in the world, which means we can’t just focus on a logged-in experience which has historically been the company’s focus. We have to take this great content that we have at Twitter and give it to individuals at that moment in time that they want it, in the place that they want it and really allow them to connect to their world. So that would be the third reason. And each one of the changes fall into one of those three buckets.

Mark May - Citigroup

Yeah. I was going to try to avoid this for as long as I could, but when I reached out before this chat, every NASDAQ [ph] investors what did they want me to questions out is all about users – user growth, user engagement, I guess I have to go there. Talk to us about – let us focus on last quarter, you had a really good result when it comes to users and engagement. Seems to be some scepticism out there around how sustaining that is, what actually drove that, walk us through a little bit of these two things and particularly what would you say of all the various things if it’s some meet your event during the period or product enhancements or just organic growth, what really contributes to that and based on that, how sustaining do you think –

Anthony Noto

I know people really want to focus on what – like one thing that drove the changes, and it’s really the collective things that we do. At the end of the day the core value proposition for Twitter for users is that it has an ability to connect them to real time information at the moment that they want it, and we have great content – great breadth of content and great depths of content, and in many cases, people are not aware of that content, or it’s not organized in a way that is useful to them. And so what we are focused on from a product innovation standpoint is really four big pillars. The first is making sure that we continue to get great content on Twitter. In the United States, we do have great content. There is a significant amount of well-known publications of well-known brands, media companies, experts, very credible individuals in certain areas of specification, and if we had no one additional person that tweeted on Twitter, we would have a great content trove to satisfy the needs of users. Of course, we want to continue to add to that content, make it more integrated, more rich media and continue to evolve. Outside the United States, we have a real opportunity to continue to build that amount of content both the breadths and depths of it. So that’s the first pillar.

The second pillar is really organizing it in a way that is really relevant to the user. There has been a lot of press written about some of the testing we have done around making the timeline more relevant. Today it’s reversed chronological order which is in the most relevant experience for user. And sometimes things happen hours before I open up my Twitter application that are relevant to me at that moment in time but I don’t see them because they are buried at the bottom of my Twitter timeline feeds and putting that content in front of that person at the moment in time is a way to organize the content better. So Stenograph took our executive team to Ofcom yesterday through his priorities for 2015 and we’ve just gone through a zero based budgeting process for 2015 where every key executive walks through their priorities and one of them is the search. If you think about our search capabilities, we have a great data set of topical information, or topical tweet and the hierarchy within search really has to lend itself to that taxonomy in that hierarchy and have an algorithm that delivers the depths and breadths of the content we have on a specific topic and then eventually as it relates to people. So that’s in organizing the content and many of those things we could do there.

On the new user experience, we’ve talked about this a lot but it is a dramatically different experience going from 12 steps to becoming a user to six steps, and that’s a small change on the margins but it adds up over time. But additionally, we’ve talked about testing for a logged-out experience, and logged-out experience is a real opportunity for us to satisfy users’ needs. If a user on CNN and they click on hashtag Buckerson [ph] tweet about Buckerson and they come to Twitter, we put up a user registration site for them, enter username and password. If they are not a user, they may decide not to put in that information and we miss the information to give them all of that rich real time information about Buckerson. Similarly if someone types in a search on Google, and comes to Twitter, we’re just giving a profile for the person. If it’s not a person as a topic, they have to register and they have to do a search. And so we want to knock down these friction points and give consumers access to the content whether they want to log in and not log in. And that’s a real opportunity.

Mark May - Citigroup

Things like removing that registration wall for the non-logged in, could that have a near term impact on new user registration but a longer term benefit or are there any examples of maybe specifically that or other things you’re doing, user could be some near term impact but long term gains?

Anthony Noto

Yeah, what I say is we’re going to do all of these things methodically, we test and we make sure we understand what the implications are. And so as an example, individual users are not going to wake up one day into their timeline completely ranked by an algorithm. But will they see a really relevant tweet because they are an ardent Red Bucks fan and they follow every Red Bucks player and it’s obviously they want to know what the Red Bucks score is but it came six hours ago and so we won’t change the entire experience but we will do incrementally over time, because there is a fabric of the experience today that’s valuable to 271 million active users. And we’ll probably make the changes over time. And our goal is not necessarily to convert everyone to a logged-in user, and it’s not to make everyone a logged-out user. Our goal is to build the largest audience in the world, and we have to give them the content the way they want.

Mark May - Citigroup

Is some of that intelligence that you are building to help place as relevant content where it should be being used on the advertising side as well or –

Anthony Noto

Our advertising has always been based on your interest and your activity and the data surrounding it and that’s how we really sell advertising to advertisers, I think one of the compelling reasons why we have such high click-through results [ph] versus our competitors is that the advertising is in the proximity of other defined interests, not imprudence but actually defined and expressed into by who that person is following. And sticking with the Red Bucks example, if I am following every Red Bucks player, there is probably a high probability that I may have propensity to buy Red Bucks -- and they have propensity to buy tickets from the Red Bucks and other types of merchandising. And so we leverage that data in a way that really delivers not as derivative or referred context but an actual tied to their interest.

Mark May - Citigroup

Maybe I will just pause there and see if there is any questions. One right up here.

Question-and-Answer Session

Unidentified Analyst

Sorry, just a clarification, you’d mentioned that you had four pillars you want to discuss. I think I got three of them. So what was the fourth?

Anthony Noto

Yeah, the fourth one was expression or sharing. It’s an important distinction that we’re not in the communication business. We are in the information and sharing and distribution business and under information falls content and data. And so when you use Twitter today, if you want to get conversations from a public environment to a private environment, you only can do that in a very singular way, one to one. But if the Green Bay Packers on Thursday beat the Seattle Seahawks, and I tweet a message that my friend to Seahawks crush the Packers go home, she said, a couple of my college buddies may reply to that. I am not sure I want to have a conversation in front of my boss and the rest of the 270 million global users about that conversation and they want to take that to a private setting which you could do through direct messaging. Today you only can do that one to one as opposed to one to many. So that’s an example of innovation around sharing or expression that we could pursue over time and that would be the fourth pillar.

Mark May - Citigroup

There is a question –

Unidentified Analyst

Two quick questions. One is there is a lot of users that still have difficulty using Twitter. So lot of our parents have finally updates to figure out that to come a while. Is there something we can do with Twitter to make this easier for users that are not sophisticated, not as tech savvy? The second question is about not so much user growth but really if you think about Twitter the way we see it on TV, not just in the US broadly, sometimes even more internationally, as brands are getting some value out of that, is there a way that we can capture some of that brand value that we are permissioning that we allowing effect at Twitter and monetize it in some way?

Mark May - Citigroup

On the first question, there is a number of initiatives to make it easier and when I think about the content and then organizing the content -- organizing the content is not just about the current users that can find the content, it’s about new users some of which may not want to log in and so creating a tailored experience when they land on our home page so to speak, or our app, that actually is a rich experience of the topics surrounding your interest of where they come from. If someone does a search on Google, we should actually deliver and click through to Twitter, we should actually deliver the search results without them having enter the search result, without having them logged in. Similarly if they come from ESPN from a better tweet, they should land on an experience that is rich with all the content that surround it and we should then actually make adjustment of other information that they could follow based on collaborative filtering and inferred interests.

The thing I’d say about tailored timelines and what we do with the World Cup is that was really focused on seeing if we could drive engagement of existing users but it could be very valuable for driving new users. So if you have a specific interest, for example, the VMAs won a couple weeks ago, in the future we may decide for that event to create a tailored timeline around the VMA. If we did that, we would want to go out to existing users and make sure they are aware of it, we’d also want to make non-users aware of it because that may be a very specific use case that would be caused that user to come to Twitter that maybe the last user has never registered, to get that specific channel and that experience around that specific content, that’s something we did not do with the World Cup. If we did the World Cup again, I think we would advertise the World Cup specific timeline to a broader set of users and make that an easy experience for them to – really get the breadth of the content benefit that we have.

We have done other things that have really just scratched the surface. We send emails now to lots of users that give them interesting and topical tweets for that day. They can click on those tweets and go straight to the timeline and not have to add additional followers and the information is robust and we of course give the other suggestions while they’ve increased the breadth of the content they have. Push notifications, when LeBron James announced as he was going back to the Cleveland Cavaliers we could do a push notification to anyone that’s following the NBA or LeBron James or other basketball players of note. LeBron James has announced, push you to find all the news. If you are interested in the economy and GDP report come out, we could push a notification to you. If there is a tragic event, we could push a notification to you. So we want when those things happen to capture the opportunity to bring you to an experience that’s efficient and unlock the value of our breadth of content.

Mark May - Citigroup

Your question on kind of getting paid on earned media, did you –

Anthony Noto

The thing I’d say is we want to know the user experience for the consumer. Similarly we want to leverage the information that we have in data and interest to give advertisers a way to reach their audience in a way whether that’s through a marketed vehicle or a non-marketed vehicle. So we have many different promoted products, we continue to launch the breadth of promoted products. If the promoted products help them do something that’s bigger and a better return than not using promoted product, then we’ve accomplished our goal. But forcing that meat to paying for something that we want the platform to do naturally wouldn’t be us driving the value through the advertiser and we see the need to do that for both advertisers and individual consumption.

Mark May - Citigroup

Any other questions in the front raw here.

Unidentified Analyst

I understand that you want to grow towards being the biggest audience in the world and to make sense that you will be able to monetize a lot of users that are not logged in, but can you talk about the value of the user who is logged in versus who is not and how you handle that friction, because clearly you have lot more information if they are logged in that you know a lot more about them?

Anthony Noto

Sure. You would be surprised – we know a lot of information about someone that’s not logged-in based on where they are coming from. As an example, go back to the ESPN example, they have clicked on a feed on ESPN, we know they are coming from a sports site. We also know what tweet they clicked on. Additionally we may have information based on their cookie where they were the last three sites prior to that, they could have been on Twitter, they could have been in the Economist, the Wall Street Journal and we will have that specific information when they come to Twitter and be able to serve our content in the long run not tomorrow that meets those needs and also provide advertisement. So we want to make sure we know the user experience in the logged out experience which is still an experiment before we start introducing monetization. But I want to make an analogy, we think the monetization opportunity for a logged-out experience is very large and some of that’s attractive.

If I was selling advertising on ABC through the entire day to some of that was interested in sports, I would likely not be able to charge as much for that person that’s interested in sports on a broadcast network channel. If that person was on ESPN which is a very specific experience that confirms they are sports enthusiasts, I could charge a higher price because it’s more targeted. If we create an experience like the World Cup and drive logged-out users through tweets on Twitter, through advertisements, through searches on Google to that logged-out World Cup experience, I can likely charge high premium for that specific advertiser against that interest group than I could in our main timeline which is the equivalent of broadcast network timeline as opposed to individual channels that have defined interests even though they haven’t logged in. And you could say that playing out in movies and many other categories, entertainment, politics et cetera.

Mark May - Citigroup

Maybe a question on international monetization. If you could talk a little bit about kind of what the drivers are for the differences in monetization either by country or just more broadly US, outside the US, is it – do you think it’s primarily a function of just where we are in the evolution of the digital ad market in those particular countries or is it something that you guys have more control over in terms of building out the ad product, ad sales, that sort of thing?

Anthony Noto

Yeah, the monetization difference across internationally versus domestically is very similar to the well-worn path of other internet companies that have come before us. It’s really due to the timing of the scale of audience and therefore the number of advertisers and the infrastructure that allows them to participate. So we’ve slowly started to roll out internationally monetization via our self-serve platform in a number of countries. Less than 40% of our footprint is now, you can now self-serve advertising. We will continue to look at market opportunities via either feet on the ground, sometimes we use resellers, sometimes we use our owned sales people and then sometimes we are using just self-serve. But the delta between domestic monetization and international monetization, we think the opportunity to close that similar to other companies is going to reflect the same attributes and factors that others have used to close it which is more people in each market and then opening up for advertising once you have that scale and making sure you have the right sales force for that type of advertiser and then the right tools to measure and to target. And so we think we still have the structural divide that everyone has but we will close the gap to that, that structural divide.

Mark May - Citigroup

Any questions here in the front?

Unidentified Analyst

Hi, can you talk a little bit about your relationship with Nielsen and what is its value to you and what is the cost to you?

Anthony Noto

So the relationship with Nielsen is the Nielsen TV Twitter rating. We see Twitter as a unique second screen experience as opposed to most technology companies. We think we complement other media properties which is why we think we benefit from such great content and a partnership like Nielsen. So creating a standard of measure that ties the social impact of Twitter, the television shows helps Twitter in influencing those programmers to act more through full screen process. So they’re not just programming for the television, but they are programming for the second screen as well which increases engagement and ultimately what they care about the most is driving to tune in. And so this is a rating that helps to show them how they are doing relative to others when you factor in the impact of Twitter on that show and it’s a standardization that allows people to do what the opportunity is relative to the competitor set and hopefully that results in a big payoff which is greater tune-in and therefore bigger audience and better advertising for them.

Unidentified Analyst

What does it cost to you? Like do you have to the share some of that with Nielsen like –

Anthony Noto

No. Or is your question what’s our contract relationship in terms of economics, we haven’t disclosed that there is economic ties between us and Nielsen.

Mark May - Citigroup

What about – Anthony, can you talk about where Twitter fits in, in terms of transactions and commerce and you – the company has made an acquisition of CardSpring and brought in Nathan Hubbard to run that group. Kind of what is the broader vision or strategy, how does Twitter play in that?

Anthony Noto

Yeah, I mean commerce evolved on Twitter without any effort from the product team and it became obvious that there is a real opportunity to create another ad format.

Mark May - Citigroup

Sort of affiliate links and things like that –

Anthony Noto

There was another – number of different individual initiatives and so the first thing that we have done is create website Cards which allows an advertiser, an ecommerce company to do a product tweet and so the interface between the click goes straight to their website page and they can try to transact. We’ve talked about hiring Nathan Hubbard and the opportunity within commerce and we would like to bring the distance between the individual user of Twitter and the actual purchase occasion closer together and there is a number of tests that we are doing there in a number of different formats that would help that distance be shortened quite a bit both from a product and an offer standpoint. And so it’s really just a test at this point and we are learning from it. We think it could be a unique opportunity to grab their horn of the stream of revenue.

Mark May - Citigroup

As you guys are testing more of these kind of direct response type advertise – if it’s mobile app installs or commerce cards, are there tests – are you finding that the Twitter user which is there to kind of consume content and information, are they transacting at similar levels as maybe other platforms that tend to be more transactional by their nature like – how are their conversion rates for your beta advertisers compared to what they see in other channels?

Anthony Noto

We think they are really competitive. The amazing thing about app downloads is that we have highly competitive early stage companies paying for distribution to get additional app installs in our platform like Uber and Lyft. But we also have well established brands with built-in audiences and built-in user bases like Electronic Arts also paying and marketing to have app downloads. As we – if the business, we only went general available with mobile app downloads last year, we have seen a nice improvement in the business and as we drive more and more scale we think we will continue to drive great returns for those types of advertisers. We’ve been pretty innovative with a long ad format that better meets the needs of a specific objective of the advertiser. So mobile app downloads is an example. We’ve not just launched mobile app downloads but we’ve changed the mechanism that causes payment. So all of our products except for broad accounts which could be a CPM based product, or pay for perform. And an app download instead of just having the advertiser pay when someone clicks on the link, or someone expands or retweet, they only pay when someone clicks on install which is the mechanism that’s further down the funnel. So not only we’re launching all these additional formats, we’re also giving them mechanism to cause the entire funnel from lead generation to all the way to acquisition to better tailor their marketing approaches through specific goals.

Unidentified Analyst

Anthony, can you give us a sense of what percent of ads are sold by programmatic or self-serve versus by a [indiscernible]? Seems like advertisers all else being equal, you prefer not to talk anyone by an ad?

Anthony Noto

Yeah, so the vast, vast majority of our advertising still comes from what we call our DSO sales channels, it’s our direct sales force. The second channel we have is mid-market sales and the SMB or which is typically self-serve. A very, very small portion of self-serve constitutes a percentage of advertising that’s very small. We do see it as a huge opportunity. Some of the other companies that have been really successful in launching self-serve have been able to generate relationships with a million plus advertisers. We are not near that level yet and so we think we have a lot of upside. We have been very successful at acquiring and building relationships and driving incremental spend from the hardest advertiser to commence the branded advertisers and so we see a big opportunity in the small medium business and through self-serve which is as you guess to you point a much, much higher margin revenue stream. We haven’t disclosed the exact percentage.

Mark May - Citigroup

With sort of the friction there, because you needed to develop on your end some of the technology and products, or is it adoption on there – they have when the engineering staff focus on building on other social networks and kind of --

Anthony Noto

So when we think about self-serve and direct response we feel like we have the entire stack now, one you have the self-serve platform. We have the right dashboard, we have the right formats. We’ve recently launched not just mobile applications but also the website Cards, conversion tracking, tailored audiences. So we feel like we have the right stack for DR and for SMB and now it’s a matter of training and education and – which Alfonso [ph] runs that for us, who also did it at Google. So we feel like we have the right people running it. We have the right stack and it’s a matter of just educating and testing and iterating.

Mark May - Citigroup

And developing the products and now you are going to market.

Anthony Noto

Correct.

Unidentified Analyst

On that topic, you just launched conversion tracking I think the last couple of weeks. And you have, I think, you are in five or eight countries with self-service, is it pretty limited, still – is it in fact ready for prime time and you’re ready to scale or yeah, it could take another six months to a year before you are ready to really bring volume on self-serve? And then similarly on international, you have a mix of usage versus revenues is split 70:30 or something like that, you had two guys you brought in before the IPO from Google to head up international sales, where do you think that is and is self-service a big part of that or is it just blocking and tackling and building out a larger sales force globally over time?

Anthony Noto

Yeah, our international revenue was 35% last quarter as opposed to 30. So on the self-serve side, we feel like we have the whole stack, and so that’s why we are rolling it out internationally and we’ve rolled out a couple of countries in Q4, and Q1 and Q2. And we will continue to do that, it’s a big priority for the rest of ’14 and ’15. I am not sure if I got your other questions but I think what’s the bottleneck on international. And what I would say is each market is different. We want to know the consumer experience, drive scale of users and the we will adjust that market from an advertising perspective. It does not do us or our shareholders any service to jump on the monetization in the market and so we feel really good about the value proposition for the consumer and then the value proposition for the other customer. We see that’s a big opportunity to close the gap but we’re going to make sure we go out with a measured pace.

Mark May - Citigroup

There have been some public announcements some arrangements with some of the larger ad agencies Starcom, I think there was another. Is there an element of that that kind of ties in to the self-server part of those arrangements to kind of plug in to the demand that they have out of their trading desk and kind of – that’s a part of the story as well?

Anthony Noto

Yeah, I mean those arrangements are really beneficial to us. They give us visibility into what we do in upfront or commitment. And in exchange for that, in terms of spend we dedicate training resources, market research resources and now there are type of customized things to help them sale to their advertisers the value proposition of Twitter. As you can imagine if a big branded top 100 advertiser has a $10 million budget to spend in a quarter on Twitter, there needs to be an interface to help them optimize their campaign to get the types of objectives achieved that they set. And so we help with that type of service as well, we give them a dedicated support.

Unidentified Analyst

You guys after the quarter provided the third party data user number from 14 to 11. You also changed the definition of stall. So I was wondering – can you provide historical numbers so we can compare that on an apples-to-apples basis and also just generally what’s defined by these sole users, if we get some more detail on, what that 11 million really represents?

Anthony Noto

Yeah the 11 million represents those – that percentage of MAUs that only use – solely used their third party application that access Twitter. And it’s exactly what the definition said, there is no definition beside sole. That’s what they use, they don’t come to the application.

Yeah, we didn’t provide additional disclosure beyond the – on the other quarters we just provided that disclose for that quarter. Going further the apples to apples.

Unidentified Analyst

Hi, could you give us some more information on BotMaker and Scarecrow and how you think the percentage of bots will go down in the future based on that?

Anthony Noto

I am not familiar to what you are asking. Are you asking me about spam?

Unidentified Analyst

Yeah.

Anthony Noto

We have very sophisticated spam technology and it’s something that we take very seriously and we have a very rigorous process that we have made it from our MAU count and it’s a conversation we have every day.

Unidentified Analyst

One of the things I struggled, I was just trying to figure out, what Twitter’s total adjustable market is, right, when it comes to calculating revenue growth and things like that. So when you look at your customers’ budgets do you think the overall ad budget of your customers is growing or do you think they are taking money away from other online advertising sources to give to Twitter or is it coming from TV or print advertising, things like that, how do you think about that sort of shift?

Anthony Noto

Yeah, I think of our adjustable market as a digital, ad market would be obviously a sub-sector of overall advertising and for the last 15 years we have seen a migration from overall advertising towards digital advertising. People often ask us the question where are the dollars coming from and there is no specific answer. Some of the advertising we get are from companies like in Uber or Lyft where they may only be doing digital advertising. And so that’s new advertising for the industry but it’s [indiscernible] but originally it’s solely in digital. So I would say the market for us is digital advertising and obviously that’s growing faster than total advertising and we are growing faster in digital.

Mark May - Citigroup

Maybe if you could talk a little bit about the importance of MoPub and how that impacts the story. Is that an important element of the business, I assume it brings a few things to Twitter, it brings real time buying and selling, it brings installed base of advertisers, it brings a network of network. Maybe talk a little bit about the importance strategically for the business and where are we in the process of integrating the MoPub into Twitter?

Anthony Noto

Yeah, MoPub is a part of a broader ad tech platform strategy that benefits that business and that revenue line but it will also benefit our overall business. MoPub has done really well. We’ve only integrated mobile app downloads from Twitter and MoPub. The company is seeing strong increase in the number of auctions, 170 billion from 130 which we talked about on the call. They reached a billion iOS and Android handsets, which is really critical when you think about applications and SDKs and that gives us a nice distribution system down the road. We layer TapCommerce on top of it which is a demand side platform on top of a mobile ad exchange, and now we have vertical integration. So the combination of those two things will capture a portion of the dollars that are going in that direction. But what it will also do is give us an ability to better meet the needs of an advertiser in a more comprehensive way. When we go to an advertiser, they have many objectives some of which we can solve, some of which we don’t have the ability to solve. By having MoPub and TapCommerce we can increase the products and the objectives they may specifically have in their ad budget. So it gives us access to a broader way of their ad budget and lets us portfolio management on that spend. And to date the thing that we’ve leveraged the most is just the mobile app downloads but you could see us using Twitter inventory potentially there and also satisfying some of the demand that we get through Twitter budget that goes unspent on Twitter for different reasons through that platform as well.

Mark May - Citigroup

And are those couple of opportunities further out or –

Anthony Noto

We’ve just scratched the surface and getting their synergistic benefits. At this point I would say the benefits are more strategic especially on the SDK side.

Mark May - Citigroup

Any other questions? All right. I think with that, thanks Anthony.

Anthony Noto

Thanks Mark.

Mark May - Citigroup

Appreciate it.

Anthony Noto

Appreciate it. Thank you.

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