Prime Minister David Cameron bagged himself a table with some of Twitter’s biggest executives this week in London alongside Boris Johnson to see if Twitter would consider good ol’ London Town as a base for its European HQ. If this does happen London’s Old Street would be dubbed Silicon Roundabout.
According to the Sunday Telegraph, Twitter has placed their HQ in London, with reports that the new office will probably be open in the New Year. This though is yet to be officially confirmed but Katie Jacobs Stanton, the international strategy maker let slip on her Twitter “Hugely impressed with PM Cameron @MajorOfLondon & the @Number10gov teams.” Katie is said to be controlling the upcoming planning, organizing and staffing of the latest European HQ.
The Silicon Roundabout is meant to be the heart of the UK’s dotcom boom-and no way a poor relation of Silicon Valley-so it seems like a great place for Twitter to make its nest. Twitter’s main HQ is in San Francisco, California but it has been widely reported that the company wants to spread its wings further afield.
The UK government has already pledged £400 million funds for the new Tech City also around Silicon Roundabout. A number 10 source said the Government is keen to get Twitter to set up its first HQ outside the US into the UK “All that matters is that they come to London” he said. “They met the PM and Boris Johnson, as well as advertising execs and key technology partners.”
So the big question is…Is Twitter even profitable yet?
From the beginning every Tom, Dick and Harry has been asking the same question; How is Twitter supposed to make money? especially when Twitter turned down an acquisition offer of $500 million from Facebook ($100 million cash and about $400 million in equity).
In early spring 2010, Twitter announced it’s first direct sales revenue model, ‘promoted Tweets’ and many hailed the in-stream advertising program as the company’s saviour.
But Twitter COO Dick Costolo told CNN Money that Twitter is not turning a profit from the promoted Tweets. “They’re effective, advertisers love them. We’re making as much money as we need to make off of them right now,” he said. But, he continued. “We’re not profitable right now. The specific thing I say over and over is that we’ve got plenty of time to grow.”
This should be true: Twitter has raised $160 million in venture capital since it was founded in March, 2006.
Costolo insists that the current “promoted Tweets” will be “just one pillar of monetization” in the future. It’s hard to imagine how many more ways the company can leverage its linear content stream, but they’ll clearly need to invent some new ways to make money.
What does that mean for us?
Bringing a big name company like Twitter to join the likes of Google, Facebook and Microsoft would be great to our growing tech market and I’m happy No.10 are trying to get involved in investing and progressing the technology sector in the UK which cannot be a bad thing, they just need to watch where they put the tax payers money. Without Twitter having much of a financial ground, buying a HQ office in London is going to be expensive. Hopefully Twitter will bring lots of employment opportunities to the thousands who are seeking work at the moment.